Dave Ramsey: Cash Value Life Insurance Is GARBAGE

Dave Ramsey

Dave Ramsey, Hero of the Life Insurance Industry

Dave Ramsey is a famous American radio and TV host and author of several bestselling books. Each week, 4.5 million people listen to The Dave Ramsey Show. Dave’s focus is on teaching people how to manage their personal finances.

Dave does not sugarcoat his views on cash value life insurance. He bluntly states that it is “garbage”, a “ripoff”, and “the payday loan of the middle class”. He advises people to buy term life insurance and to do their investing “anywhere but in an insurance product”.

Dave briefly summarizes his views in an article titled, “The Truth about Life Insurance“.

Notably, he points out that, with many cash value life insurance policies, the insurance company only pays a death benefit when the policyholder dies, and it keeps the policy’s cash value—i.e., the insurance company keeps all the savings that the policyholder has built up after “being ripped off for years”.

In contrast, if a person bought term life and invested the difference in low-cost index funds, upon death, the person’s family would get both the death benefit from the term policy as well as all the savings accumulated in the index funds.

Dave concludes that people are better off buying term and investing in a cookie jar than buying whole life and giving their savings to an insurance company.

Below are four video clips from Dave’s radio and tv show. In two of the clips, he has a heated argument with insurance salesmen.

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