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Advice from Nashville's Financial Guru Dave Ramsey

Dave Says
By Dave Ramsey
Author of Financial Peace and The Total Money Makeover

Why is whole life insurance bad?"

Dear Dave,

I'm confused about life insurance. My agent is recommending a whole life policy, but I've heard you say 20-year level term insurance is the best. What's so bad about whole life?


Dear Gary,

It's simple. Whole life is about ten times more expensive than good level term insurance. That alone should be enough to make you walk away. You also realize ZERO returns on whole life policies for the first three years, even though these policies are pitched as a vehicle to build up savings for retirement. After that, your "savings" still only grow at about two or three percent.

Want more? The savings you've finally built up after being ripped off with high premiums for years won't go to your family when you die. They'll still only get the face value amount of the policy.

Whole life is a horrible savings plan attached to expensive insurance. Stay away from it!

- Dave

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