For over 20 years I have worked personally with Dave Ramsey, his listeners and team members to help them make important and informed decisions about their insurance needs and the most cost effective ways to address them. Through the years I have responded to over 10,000 of Dave’s listeners regarding their insurance questions.
This blog contains many of the most frequent questions and answers since they provide an excellent resource to Dave's specific advice on very specific insurance questions. I hope you find this information to be a valuable resource that you can refer to many times in the future as you progress along your financial path. Click on the category noted which relates to your question so that you can see the posting currently available. If you do not see your question or still have concerns please don't hesitate to use the "Question Widget" noted on this site for further information or call us toll free at (800) 356-4282.
Many people are surprised that the advice from Dave and I doesn’t always involve the purchase of insurance as the only alternative. Insurance is a key component of any family's financial plan but it can also be a drain and a detriment if the wrong plans are purchased. Implementing the plans and approaches that Dave and I recommend, most importantly, the establishment of an emergency fund, will help reduce a families overall insurance costs and allow them to focus their dollars on more important things such as getting out of debt and growing wealth.
No. These policies provide a death benefit equal to the amount of your mortgage in the event of your death. Mortgage life policies typically start out with premiums equal to or higher than level term life insurance policies. Each year the mortgage life plan is in force, the amount of coverage goes down as the amount of your mortgage goes down – but your premium stays the same. In essence, your policy loses value through the years. The premium and death benefit on a level term life insurance policy, however, remain the same for the entirety of the policy, thereby representing a much better value.
No! Individual dental policies are a poor value. If you have access to a group where the employer pays, then our advice is to take it since there is no expense for you. However, on an individual basis, dental plans are really not worth the money you pay. Most plans have a cap of $1,000-1,500 a year in benefits and only pay 50% of the cost for major services likes crowns, etc. In the first year, they only cover preventative care, but charge you the full premium. At the first renewal (when your limited benefits kick in), they jack up the price. You are just better off budgeting for your regular visits and using your emergency fund for the big stuff if they do occur.