How Life Insurance Providers Are Screwing You Over! – Dave Ramsey Rant

Don’t waste money on cash value life insurance . Get a term life policy today:


In this video, Dave reads an article about universal life insurance and explains why it’s the “the worst of the worst” of financial products. Unlike term and whole life insurance , universal life insurance allows buyers to have flexible premium payments. But eventually, the cost increases and those buyers are faced with an unattractive choice: pay an extremely high premium or collapse the policy altogether.

Here’s how universal life insurance works:

A portion of your premium covers your insurance and a portion builds cash value as an investment. The insurance is based on an annual renewable term, meaning that the cost of your insurance increases as you get older because statistically speaking, your probably of death is higher when you age.

So let’s say you pay a $200 premium at age 35, with $50 of that covering your insurance and $150 going towards your cash value investment. By the time you’re 60, the cost of your insurance might be $250. You’re still only paying a $200 premium, so the extra $50 starts coming out of the savings you’ve been investing for years. Once your savings are gone, the insurance company comes knocking at your door, demanding you either pay a higher premium to cover the increasing cost of insurance or you won’t be covered anymore. Now you’re left with no savings and potentially no insurance .

In this scenario, you could have been paying a fraction of the cost for term life insurance and had separate investments that your life insurance company can never touch. Dave recommends getting 10-12 times your income in term life insurance and

If your insurance policy is building cash value, you’re getting screwed. Get term life insurance today:


Read more about the different types of life insurance : insurance

Make sure you have enough insurance with the 5 Minute Coverage Checkup:

Life insurance is NOT an investment. Watch Dave explain:


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Comments (24)

  1. I love my whole life policy, but you are right about the universal life policy… They are awful. Universal life is constructed to eat itself alive eventually, all dependant upon how well the stock market grows. Whole life is constructed to continue growing all the way up until you either die, or the policy matures and pays out the entire death benefit to you directly (tax free).

  2. Reading comments on Dave Ramsey videos make me think how easy people forget… everyone forgot 2008, or maybe they were to young to understand it. But don’t worry… we have a couple of bubbles that will make you learn the hardest way.

  3. The real problem is the people who are dumb enough to need insurance at 60.  Maybe if you cashed out the policy earlier it wouldn't be as big a problem.

  4. INDEX UNIVERSAL LIFE INSURANCE look it up its better than whole life and term

  5. If a person have a whole life insurance.. they don’t need to buy home insurance.. this is right ? Please help me out

  6. Im leaving out of the country in a couple of days. I want to have term insurance on myself for my daughter. Can anyone recommend me on a good insurance company ASAP please

  7. Hey Dave! I live in Canada and Zander Insurance doesn't service up here from what I can tell. Do you recommend any local insurance companies to get a reasonably affordable term policy?

  8. An Indexed Universal Life Insurance is not a bad product if structured correctly , it’s an amazing investment if done properly. But sadly their is many but many agents who do a poor job or worse looking for a quick comission and make it look bad like idiots . And knowingly know a policy would lapse and cancel in a couple years . It’s not the product the product is great but theirs many idiotic agents out their that are scams and it’s shameful .

  9. Where’s that egotistical insurance salesman that called in a year or two ago? Lol

  10. Nice to know the 1970s new York city hustlers are still out there looking for the next sucker

  11. How do we find this article? It would be great to have.

  12. A friend had a variable rate annuity worth $350,000 about 6 years ago. He could keep it there or buy 17 years worth of pension from his employer, worth 42% of his pay with a 100% spousal benefit in the event of his death. You pointed the way for him, Dave Ramsey. I asked him if he had $35,000 per year more pension, would he give it up in order to get a variable rate annuity worth $350,000. The obvious answer was no. He’s very happy with the decision, as is his wife.

  13. just to review ………term is for people with spouses and kids who would be financially crippled if you were to die suddenly. the policy is relatively cheap with big payouts because the odds you will die within the term of the policy is relatively small. Whole life is high premium and lower payout but a guaranteed payout upon the death of the insured. Whole life is for people who cant save a dime because the insurance company is not stupid at math. they take the money you pay in premiums and the payout in almost ALL cases is LESS then any idiot would make in returns if you YOURSELF invested the premiums and saved your money throughout your lifetime. Universal is basically salesmen promising whole life guarantees at term rates………..but because insurance companies are greedy and customers are cheap its a perfect storm that screws the customer and its another product for insurance companies to separate idiots from their money. Please educate yourself and or buy Insurance at your own Peril…………..

  14. Thank just learned something

  15. What the difference between whole and term life insurance.

  16. I have a 20 year term return of premium, when I turn 40 ill be getting back all of my premium, which then I’ll use to buy a permanent life policy with the lump sum I have given

  17. I am a bit confused on the value of these. My wife and I got a policy with my disabled son as the beneficiary. We pay for 15 years into the policy. We both have to die in order for my son to collect (any time – before or after the
    15 years is up). Total we will pay in is about $82K. Benefit is $250K – again at any point in time. I am 58 and my wife is 67. I looked at the future value of the money and it sure looked to me like we were getting a pretty good return on the money (I figured about 6%). Can someone explain why it isn’t?

  18. is it good to get life insurance at all, or just use that money to invest in something else?

  19. Term is great, until it expires and you are only 50,60,70 and still need coverage. Very few at that age are financially independent. Its a nice thought but not reality.

  20. I love my state farm $ 300,000 term 30 year life insurance if I out live the term when am 65 years old am get 47,000 it's like a savings account I only pay 98 a month my family ain't going be asking for no donations

  21. these policies are only for the deadly woman out there… you know who you are I feel sorry for you're future dead husbands and boyfriends lol

  22. Life insurance is stupid. Why pay money that will return after death? Thats the last thing you’ll care about then.

  23. Before someone lets a Universal policy lapse they should try selling it to someone as a viatical. Better than getting nothing. Very sad.

  24. Can anyone explain to me the difference between life insurance and term insurance? I'm 19 and currently have a life insurance policy. Trying to understand it better.

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