What Dave Ramsey Thinks About Variable Universal Life Insurance

If you're new here, you may want to subscribe to my RSS feed. You can also subscribe to Time To Budget by Email.Thanks for visiting!

I recently needed to find an answer to a question I had about Variable Universal Life Insurance so I check Dave Ramsey’s site for the answer and found this.

A listener asks if he should he do a variable universal life policy if he has no debt except the mortgage and has maxed out all retirement savings.
ANSWER:
No.  You should pay off your house before you do any additional investing and make sure you’re only investing 15% in the retirement savings plans.

The variable universal life policy (VUL) is the latest version of a cash-value life insurance plan.  It’s a mutual fund snuggled next to an annual renewable term life policy (ART).  ARTs go up every year based on your age, which means it is one of the most expensive ways to buy term insurance.

When you’re paying for both a mutual fund and the ART at the same time your insurance is too expensive and the money that’s supposed to go to your investment goes through the insurance company first.  This means you’re paying tons of unnecessary fees.

It’s an expensive, high-fee way to invest.  Just buy the mutual fund instead.

November 25, 2007 | Filed Under Financial Advice, Life Insurance | 3 Comments 

Why is it important to have life insurance?

Why is it important to have life insurance ? The plan simple fact is that one day you will die. You will either leave your family with a money or you won’t. A life insurance policy can relieve your family of financial stress during the difficult time. Those of us still struggling to keep on the road toward financial freedom will put our families in an even worse situation if we don’t have plan ahead. A life insurance policy will not replace you but it is a gift your can leave behind for your family.

Dave Ramsey recommends term life insurance policies because they offer the most money after death as well as the lowest monthly payments. Dave Ramsey also recommends a 20 or 30 year term. If you have “savings plan” type policy (Universal Life, etc) cash it in and get a Term Life policy. Life insurance policies are not a good savings plan.

You might be thinking, what happens after the twenty or thirty years? The idea behind using a term life insurance policy verses other types is that with in the 20 or 30 years you should be gaining financial freedom. You should be out of debt, have a retirement plan, house paid off and gaining monetary wealth by long term investing.

Visit lifeinsure.com for quote on term life insurance policies. LifeInsure.com offers an easy to use life insurance quotes calculator. You can get a full explanation of term life insurance or you can watch the video they have available. Don’t waist your time with any other type of life insurance policy, term life is the best.

July 18, 2007 | Filed Under Life Insurance, Paying The Bills- Sponsored Ads | 2 Comments