Last Updated: September 2020
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Dave Ramsey is a financial entertainer, radio host, and author. His debt-free strategies are great but he does get paid for his recommendations, including his life insurance recommendations, which we’ll focus on in this article.
Below, we’ll analyze Dave Ramsey’s most popular life insurance recommendations, including his advice on term life insurance and how much coverage to buy.
- Dave Ramsey Only Recommends Term Life Insurance
- Dave Ramsey Recommends Buying 10-12x Your Annual Income, in Life Insurance Coverage
- Dave Ramsey Says to Buy Coverage Until Your Kids Reach Age 18+
- Dave Ramsey is Paid to Recommend Zander Insurance
- Review Your Life Insurance Coverage & Get Multiple Recommendations Before Purchasing
Life Insurance is Boring. Let’s Get To The Root Of It! Here are the key takeaways…
Dave Ramsey is a popular author & radio show host who recommends a few key tips for securing life insurance. But his advice is not great for everyone. Life insurance is complex. The best policy for you is based on your age, health, & family’s unique needs. Work with an independent agent to calculate all of your needs instead of adopting a general rule.
Dave Ramsey Only Recommends Term Life Insurance
Dave Ramsey says to only buy term life insurance.
We believe for middle America, most would be better off with term life insurance, or a mix of term and permanent. Term life insurance is more affordable and best for most people, but that’s certainly not always the case.
Every situation is different and this blanket advice that Dave Ramsey is giving does not always apply.
There are many scenarios where a different type of life insurance, like whole life insurance or a burial insurance policy, makes more sense.
There are many different types of life insurance, and the best policy for you depends on your situation and your unique goals.
Dave Ramsey Recommends Buying 10-12x Your Annual Income, in Life Insurance Coverage
Dave Ramsey recommends buying at least ten to twelve times your annual income amount in life insurance coverage to ensure that your family’s needs would be taken care of, should you die.
When deciding how much life insurance you need, it’s not that easy. Again, Dave Ramsey has oversimplified.
If, for example, you only have one child, and your spouse works, you may not need this much coverage. Alternatively, if only one spouse works and the other stays home to take care of four or more children, then you could certainly need more coverage.
You have to look at your family’s situation including current assets, dependents, age of you and your children, and a number of other factors to calculate how much coverage to get.
Some people may need a 1 million dollar term life insurance policy which could be 15 or 20x your annual income. That may seem excessive, especially if you have life insurance coverage supplied by your employer. However, employers typically don’t offer enough coverage to financially care for your family for any significant length of time.
Factor all of that in when determining how much life insurance coverage to buy. Again, Dave Ramsey is making a blanket statement with his 10 times your annual income remark.
Dave Ramsey Says to Buy Coverage Until Your Kids Reach Age 18+
Dave Ramsey’s suggestion is that you should ensure that you have enough life insurance cover to last at least until your kids have headed off to college, or are living on their own.
This could be at least a twenty-year plan, depending on how many children you have or plan to have. We agree with Dave on this being a minimum length of coverage.
If your life insurance policy does not run for long enough and you later have health problems when your policy comes to an end, a new policy may well cost more.
Failing to buy a long enough policy could mean that you might ultimately end up paying higher premiums to keep the same level of coverage, or worse, may find that you are unable to even get the type of life insurance coverage you really need.
Dave Ramsey is Paid to Recommend Zander Insurance
In our Zander Insurance review, we explain why the company may not be the best option for you and that Dave Ramsey is paid to recommend them.
Rather than chose the first company you find, you should always compare quotes from the best life insurance companies.
Review Your Life Insurance Coverage & Get Multiple Recommendations Before Purchasing
Make sure to occasionally check that the life insurance coverage you have in place is still adequate for your needs.
- If you’ve already purchase based on Dave Ramsey’s life insurance recommendations, you can work with an independent agent to improve your coverage and financial situation.
- If you haven’t bought life insurance yet, get recommendations from multiple sources and quotes from different companies.
Families change over the years, and so do their needs and financial requirements. It may be that you now have an improvement in wealth and have more available money, you may have decided to purchase a retirement plan, or have accumulated savings or investments.
Your income may also have changed and could have gone up or down, so any change in income is definitely a time to review the amount of coverage you have in place and to ensure it is still adequate for your needs.
We recommend you take the time to check out your level of coverage at least once a year and certainly after any change of circumstances.
There are many plans to choose from and many companies out there, but by investing a little time and discussing the types of policies that would be most suitable to your particular needs, you can ensure that financial security for you and your loved ones will always be there.
If you have any questions whatsoever about life insurance, feel free to give us a call or you can get instant quotes to see just how affordable life insurance can be.
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