Comments on: What Dave Ramsey Thinks About Variable Universal Life Insurance

By: Brett

Brett — Thu, 23 Apr 2009 22:40:34 +0000

Dave is right on about vul’s….stay away from the trap!! There are SO amny things about these policies that people are not aware of (and most agents as well).
As far as world financial group goes…..stay away from them also! They are FINRA’s compliance nightmare….tons of litigation against them for what there “agents” have done to people.

By: Will Huddleston

Will Huddleston — Tue, 20 Jan 2009 23:54:45 +0000

I read what is stated by Dave Ramsey in regard to the Variable Life Insurance policy. I think the general: costs too much, too expensive, high fee way to invest doesn’t actually consider the facts, rather speaks in generalities. I think a lot of this depends on what you are comparing the costs to. If you are talking a very low cost no load index fund, and term an extended term policy…then maybe. However, for the person that says…I don’t want to deal with learning and knowing the ins and outs of mutual fund investing…I am willing to pay an advisor (whether through an advisory fee or loaded mutual funds – which ever makes the most sense) so that I can spend this time earning a living in my own business (many professionals feel this way), varialbe life insurance is worth the consideration if they need life insurance and want to be investing money in funds. Why would you want to do that if the fees are “more”. Well, maybe because when you factor in the 20 or 30 year impact of the actual cost of insurance, the actual costs of investments, tax-deferral, access to your money (often important to business owners), creditor protection (also often important to business owners), how the life insurance withdrawals work and the other potential tax ramifications. Receiving tax-deferred growth but access prior to 59 1/2 with creditor protection can not be accomplished in brokerage accounts, IRAs, etc. (Roth IRAs can give some of these options but many of these people do not qualify for a Roth IRA). Also, I know for a fact that if you look at typical costs of mutual funds (referenced by Morningstar), and then you consider the total costs of a variable life insurance policy for instance 25 years into the accumulation phase…they are approximately the same (and sometimes cheaper in the life insurance). That is equal fee to manage money or to manage money and provide a death benefit. How is that too expensive. I actually like Dave Ramsey and I completely agree with him in many areas. In fact, I agree with him in this area for the greater population. However, there are people that do not fit that “typical” profile. These people do potentially need life insurance later in life for lots of additional reasons…business planning, estate planning, charitable giving, etc. In addition, if the cost is the same…why not have the extra tax-free protection for your family. The only problem I have with Ramsey is that often times the people that could benefit from these types of plans…hear Ramsey’s thoughts without any disclaimers that these options may work for the right people. These people begin to question recommendations based on an analysis of their individual situation due to a general statement from a book or program that is targeted at everyone. Also, many people with pension plans can also benefit from owning forms of permanent life insurance to provide leverage on the payment option they receive. Often times, the retiree can receive more income today while the two spouses are together…while buying a life insurance policy designed to last regardless of how long a person lives (can’t do that with term). The option is to take a lower income to day to make sure the other spouse gets in income after the pension earner’s death. The numbers on this are staggering in favor of permanent life insurance (and in this scenario…plain old boring whole life insurance).. OK, I am done rambling…just want people to know that these products are not schemes engineered by the insurance industry to rob people of their money…they are tools that can be used for the right people and the right circumstances.

By: World Financial Group - What’s It All About? - Should You Join? : Time To Budget

Wed, 12 Dec 2007 03:14:51 +0000

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By: Mona

Mona — Wed, 28 Nov 2007 01:43:05 +0000

Hi Martin,
Thanks for stopping by and commenting. I think I understand what you are saying about Dave’s philosophy but I think I would have to agree with Dave. People come from all walks of life but most of the time people are just spending beyond their means. I think Dave’s point is to stop spending beyond your means by creating a budget that allows you to work within it. From what I read Dave doesn’t discourage increasing income either.
If one is able to live within their current means but also increases income then true wealth can come from it. Other wise you will strive to make money only to spend as much as or more than you make. I guess my point is that some people strive to reach a higher income level only to find out their poor money management kept them from gaining wealth. Before Dave Ramsey this is how my husband and I lived.

Poor money management will almost always make you poor but smart money management can very easily make you wealthy.

Thanks again for stopping by and posting a comment. I will check out your blog.

By: Martin Saenz

Martin Saenz — Tue, 27 Nov 2007 22:14:01 +0000

I like Dave Ramsey. Have read several of his books.

Disagree with one of his philosophy in that we should lower our means to below our income level. The focus should always be on increasing income levels to accommodate the amount of income we would like to see.

Nice post and blog. Let me know if you’d be interested in exchanging links. I’m building my blogroll very selectively and like your blog.

Martin
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