Burial Insurance Dave Ramsey 2024 Update

Let’s examine burial insurance Dave Ramsey before you decide which type of life insurance is a good fit for you. Dave Ramsey is a well-known radio show host and bestselling author on financial management.

Dave Ramsey is not a big fan of burial or whole life insurance with cash value accumulation. He thinks any cash value life insurance is a bad investment. He even called whole life insurance a ripoff.

Dave Ramsey recommends term life insurance as the best policy if your family needs protection from financial distress after an unexpected death. He says that you have very little need for life insurance if you have enough cash saved to pay final expenses.

This article will look into Dave Ramsey’s views on cash value insurance, including burial insurance and whole life. Read on to know if Dave Ramsey could be wrong on whole life insurance, specifically burial insurance.

FOR EASIER NAVIGATION:

• Burial Insurance Dave Ramsey
• Is Burial Insurance A Bad Investment?
• When Term Insurance Is Not Your Best Option
• Should I Buy A Burial Policy?
• How Can Funeral Funds Help Me?
• Additional Questions & Answers On Burial Insurance Dave Ramsey

Burial Insurance Dave Ramsey

According to Dave Ramsey’s assessment, burial insurance whole life is expensive and, at times, unaffordable. Dave also says that whole life insurance is sold by overly aggressive life insurance agents.

Whole life insurance falls under the category of permanent life insurance. Most people equate permanent life insurance policies with cash value.

Permanent life insurance includes:

• Whole life
• Universal Life
• Burial Insurance

Permanent life insurance policies with a cash value are designed to stay in force for your entire life.  The policy never expires even if you grow old or develop a severe medical condition later. The insurance company won’t cancel, reduce, or revoke this policy as long as you keep paying the premiums on time. The death benefit doesn’t decrease, and the premiums are fixed. In time, you can withdraw or make a policy loan on the cash value.

Dave Ramsey is not fond of whole life insurance or plans with cash value accumulation for the following reasons listed below:

• Whole life insurance is more expensive than term insurance
• There shouldn’t be a need for life insurance beyond 20 or 30 years
• Do not mix life insurance with investments
• The rate of return on investment in whole life is lower than other types of investments.

WHOLE LIFE INSURANCE CAN BE EXPENSIVE

We agree with Dave’s analysis that whole life insurance can be expensive compared with term life. It even costs more than universal life insurance because it lasts the whole life. Comparing terms to whole life can be tough because there are distinct differences. With whole life, your death benefit is guaranteed to be paid to your beneficiary as long as you pay the premiums.

On average, it would cost $315 for a 50-year-old to get a $250,000 whole life insurance policy, while it would only cost around $32 to purchase a 30-year term life insurance for the same coverage amount.

Dave Ramsey recommends buying term life insurance, saving the difference in premium between whole life and term life policy, and investing the difference in mutual funds or other investment vehicles.

Dave says that one-third of the people who purchased whole life insurance let the policy lapse within five years because the premiums are expensive. The surrender value would take 15 years to equal the premiums you paid. He concluded that it wouldn’t make a good investment if you only had it for less than 20 years.

Dave also points out that only those who keep the policy for more than 30 years will reap from their cash value. That’s a big commitment that most people can’t keep.

According to statistics, in 30 years, only 20% of those who bought whole life insurance will keep their policy. Therefore, 80% are basically letting the insurance companies use their money in exchange for a lower interest rate which they would get if they put it in their 401(k).

THE RATE OF RETURN ON INVESTMENT IN WHOLE LIFE IS LOWER

As for accumulating wealth, the whole life is slow and steady. The cash value accumulation pales in comparison with mutual funds over 30 years.  Well, Dave uses very high rates of return in his examples. While it’s true that a 10% to 12% interest rate is excellent, mutual funds carry more risk with those high, unrealistic rates.

DON’T MIX LIFE INSURANCE WITH INVESTMENTS

Dave Ramsey teaches people to keep their investment and life insurance separate. He is urging people to buy term insurance and invest the rest. While this strategy can work well for most people, some want to diversify their investment, and sometimes cash value policy can be a smart way to plan financially.

IMPORTANT NOTE: Dave benefits financially from the sale of term life insurance through his term life insurance financial affiliates.

THERE SHOULDN’T BE A NEED FOR LIFE INSURANCE BEYOND 20 OR 30 YEARS

If you are 40 years old and you invest your money in a mutual fund rather than buy whole life insurance, you will have about $500,000 when you pass away at age 90. After 20 or 30 years, you won’t need whole life insurance because you have saved enough money for your funeral. Dave calls this being self-insured.

IS THERE A NEED FOR LIFE INSURANCE BEYOND 20 OR 30 YEARS?

Some people in their 50s and 60 ask for advice and quotes for life insurance. Most of the time, the caller realizes that their term insurance is expiring and they still need coverage.

Extending life insurance coverage beyond 20 or 30 years depends on the applicant. Some people had unemployment setbacks and couldn’t invest the money as planned. Other people may have medical challenges that cause some financial setbacks.

Sometimes there are no setbacks, but the applicants realize they want to provide money to their loved ones after death.

Is Burial Insurance A Bad Investment?

Let’s be clear. Burial insurance whole life is not an investment. It is only a guaranteed financial vehicle. There is no loss element as long as you pay the premiums. Whole life burial and final expense insurance is not an investment to compete with mutual funds.

A permanent life insurance policy gives financial protection for the rest of your life. It has a guaranteed payout if the policy is paid on time. The cash value of the whole life policy is a benefit. You can borrow from it to ensure your premium will not lapse in the future.

The premium is locked in from the age you take it to when it pays out benefits. The amount of premium is permanent and will never increase as you age.

Whole life insurance is ideal for small final expenses or burial insurance because the premium will never increase and the death benefit payout will never decrease as long as you keep paying the policy.

When Term Insurance Is Not Your Best Option

In some circumstances, term insurance may not be your best option for life insurance coverage. The only reason you would get burial insurance is to make sure that there is enough money to bury you or pay for your funeral because you don’t want your family to have to pay for that.

Burial insurance is designed for seniors 50-85 years old and older who want to buy life insurance to cover their final expenses. It also caters to those with severe medical conditions that cannot qualify for term life insurance.

Burial insurance uses whole life insurance, which Dave Ramsey is not fond of. This product is superior to term life insurance because it provides permanent coverage up to age 121 years old that will not expire with advancing age or severe medical conditions.

People generally purchase term insurance to replace income and pay off debt and mortgages. Older individuals buy funeral insurance plans using whole life insurance because they want the peace of mind that the insurance benefit would be paid to their beneficiary to take care of their final expenses.

The problem with term life insurance is that it is not permanent; it is designed to terminate after some time (usually 10, 20, and 30 years). Once you are out of your term policy, nothing will be left for your beneficiary when you die. It goes against security, knowing there is money when you need it.

The other important issue with term life insurance is that it becomes increasingly difficult to qualify for term life as you age. Senior citizens may begin to have health issues that make them ineligible for term life insurance.  Only three out of ten applicants who are 60 or older will be approved for term insurance, so 7 out of 10 are getting declined for term insurance and can only qualify for burial insurance.

Dave Ramsey’s recommendation on investment is sound. The critique here is not of Dave Ramsey but his penchant for term insurance that does not apply in every situation. The truth is many people won’t get the full advantage of term insurance if it is used to take care of their final expenses.

Many Americans never have enough savings to pay out of pocket for their funeral and final expenses. They don’t make much money for retirement and rely on a pension or social security month after month. There’s no way they can save enough money to take care of a funeral or cremation. We’re talking about millions of people that don’t want to leave their final expenses to their families.

Burial insurance whole life makes a lot of sense for this marginal part of society that’s why we disagree with Dave Ramsey’s advice on life insurance. We simply don’t think that it applies in every circumstance.

Zander Insurance which is solely endorsed by Dave Ramsey, agrees with our point. A comment on their life insurance website stresses the importance of whole life insurance for burial and final expenses. And this is to quote:

“Should I Buy A Burial Policy?”

Term life insurance should not be used as a burial or final expense plan.  Since the term period can expire before the insured’s death, it is not a viable method to plan for final expenses.  Buying term life insurance is to simultaneously pay down debt and grow your savings and investments so that you no longer need life insurance when the term expires.

Dave does not recommend purchasing life insurance for just final expenses since, in most cases, he feels it should be paid from your emergency fund and savings. However, in some extreme cases, you may want to consider a plan through (BUSINESS NAME REMOVED) Insurance, which sells burial-type policies.

Dave does not recommend these since they are cash value type plans, but they may be the only way to address this issue if you are dealing with an older individual and their financial situation does not allow for any other approach.”

So there you have it, Zander Insurance which handles Dave Ramsey’s term life insurance product, simply states that there is a circumstance that burial insurance is better than term insurance, although Dave doesn’t agree that burial insurance does make a lot of sense than term life.

People who buy burial insurance cannot afford to save enough money to pay for the funeral or simply don’t want to. Some people on a fixed income fear they won’t have enough time to adequately save every month to pay for their funeral when they pass away. Thus, leaving their family to pay for their final expenses when they are gone.

While we certainly agree with Dave Ramsey on some of his financial advice and recommendations, there’s one area that we disagree with. Term life insurance is not the best all the time. Burial insurance whole life is the only option for coverage for those who are in the marginal sector and older population. It provides peace of mind and insurance coverage to those who want to take care of their final expenses to remove the financial burden on their family.

How Can Funeral Funds Help Me?

Finding a burial insurance policy needn’t be frustrating; working with an independent agency like Funeral Funds will make the process easier and quicker.

If you are comparing burial insurance and term life, let us help you; we will work with you side by side to find a plan that fits your needs.

We will work with you every step to find the plan that fits your financial requirements and budget. You don’t have to waste your precious time searching for multiple insurance companies because we will do the dirty work for you.

We will shop your case to different insurance carriers and get you the best price.

We work with many A+ rated insurance carriers that specialize in covering high-risk clients like you. We will search for all those companies to get the best rate. We will match you up with the best burial insurance company that gives the best rate.

We will assist you in securing the coverage you need at a rate you can afford. So, if you are looking for affordable funeral insurance, affordable burial insurance Dave Ramsey, or affordable life insurance, we can help. Fill out our quote form on this page or call us at (888) 862-9456, and we can give you an accurate quote.

Additional Questions & Answers On Burial Insurance Dave Ramsey

What is the purpose of insurance according to Dave Ramsey?

The purpose of insurance, according to Dave Ramsey, is to financially protect yourself and your family in the event of an unexpected tragedy. By purchasing insurance policies, you can ensure you have the funds necessary to cover funeral costs and other related expenses.

When to get life insurance Dave Ramsey?

Dave Ramsey recommends purchasing life insurance when you have young children. This type of insurance can help ensure that your family will be taken care of financially during your death.

What is the purpose of term insurance according to Dave Ramsey?

According to Dave Ramsey, term insurance is to provide financial protection for a specific period of time. Your beneficiaries will receive a payout if you die during the policy term. If you live beyond the policy’s term, it expires, and you do not receive any benefits.

Does Dave Ramsey recommend buying burial insurance?

Dave Ramsey does not specifically recommend buying burial insurance but advises purchasing life insurance. Burial insurance is a type of life insurance that covers the costs of funeral and burial expenses. It can be a good option for those who do not want to burden their loved ones with these costs (keep in mind that Dave does get commissions when you buy insurance from his vendors).

How much life insurance should I buy according to Dave Ramsey?

Dave Ramsey recommends purchasing enough life insurance to cover your debts, funeral costs, and three to six months of living expenses. This will help ensure that your loved ones are taken care of financially during your death.

What is the purpose of disability insurance according to Dave Ramsey?

According to Dave Ramsey, the purpose of disability insurance is to provide income replacement if you become disabled and are unable to work. This can help ensure that you and your family have the financial resources they need while you cannot work.

Is disability insurance a good investment according to Dave Ramsey?

Dave Ramsey does not specifically recommend disability insurance as an investment, but he does advise purchasing it to protect yourself financially in the event of an illness or injury. Disability insurance can provide you with a monthly income stream if you cannot work due to illness or injury.

Does Dave Ramsey recommend buying long-term care insurance?

Dave Ramsey does not specifically recommend buying long-term care insurance, but he does advise planning for the possibility that you may need long-term care. Long-term care insurance can help cover the costs of nursing home care, assisted living, and other types of long-term care.

How much should I save for retirement according to Dave Ramsey?

Dave Ramsey recommends saving 20% of your income for retirement. This will help ensure that you have enough money to cover your retirement expenses.

Which is a type of insurance to avoid Dave Ramsey?

Dave Ramsey recommends avoiding whole life insurance, as he claims it is not a good value for your money. Whole life insurance is a type of life insurance that lasts for the entire lifespan of the policyholder.

Is life insurance worth it Dave Ramsey?

Dave Ramsey believes life insurance is a wise investment and recommends purchasing it to protect yourself and your loved ones financially. Life insurance can help ensure that your family will be taken care of financially during your death.

What are the unnecessary types of insurance according to Dave Ramsey?

Dave Ramsey recommends avoiding some types of insurance: whole life insurance, disability insurance, and long-term care. He believes these types of insurance are not good for your money and can be costly to maintain.

What insurance should you avoid according to Dave Ramsey?

Dave Ramsey recommends avoiding whole life insurance, disability insurance, and long-term care insurance. Instead, Ramsey recommends term life insurance and investing the difference.

How much personal liability coverage do I need Dave Ramsey?

Dave Ramsey does not recommend a specific amount of personal liability coverage, but he does advise purchasing enough to protect your assets. Personal liability insurance can help cover the costs of legal expenses if you are sued for damages caused by you or your property.

What type of insurance is not recommended by Dave Ramsey?

Dave Ramsey does not specifically recommend any type of insurance, but he recommends avoiding whole life insurance, disability insurance, and long-term care insurance.

Which insurance is best according to Dave Ramsey?

Dave Ramsey does not specifically recommend any type of insurance but recommends investing in term life insurance. Term life insurance is important to protect your family in the future.

What is the most important insurance recommended by Dave Ramsey?

Dave Ramsey recommends investing in term life insurance (keep in mind that Dave does get commissions when you buy insurance from his vendors).

What type of insurance do I need according to Dave Ramsey?

Dave Ramsey recommends investing in term life insurance. Additionally, Ramsey recommends purchasing personal liability coverage to protect your assets.

Is insurance a waste of money according to Dave Ramsey?

No, insurance is important, according to Dave Ramsey, to protect your family in case of unforeseen events in the future.

Is umbrella insurance a waste of money according to Dave Ramsey?

Dave Ramsey does not think umbrella insurance is a waste of money. From his perspective, it’s important to protect your family and your assets in case someone gets hurt on your property or you’re sued for something you did wrong.

Why does Dave Ramsey need insurance?

Even though Ramsey is debt-free, he has decided to purchase life insurance. In his book The Total Money Makeover, Ramsey says he purchased $5 million worth of life insurance “for peace of mind.”

What are some unnecessary types of insurance Dave Ramsey?

Dave Ramsey recommends avoiding whole life insurance, disability insurance, and long-term care insurance.

What is the best age for life insurance according to Dave Ramsey?

Dave Ramsey does not have a specific age in mind, but he recommends investing in life insurance as soon as possible. The sooner you have life insurance, the more coverage you will be able to purchase. Additionally, the younger you buy life insurance, the lower your premiums will be.

What is Dave Ramsey’s opinion of mortgage insurance?

Dave Ramsey is not a big fan of mortgage insurance. He thinks it’s a waste of money. Although mortgage insurance can provide some peace of mind for borrowers, it’s generally unnecessary if you have enough money to make a down payment of 20% or more. Plus, it’s an added expense that can ultimately increase the amount you pay for your home.

What does Dave Ramsey say about umbrella policies?

Umbrella policies can be expensive and may not be worth the cost if you don’t have significant assets to protect. However, they can be a wise investment if you have a lot of assets and/or are at risk of being sued. For example, if you are a doctor or a lawyer.

What does Dave Ramsey say about Aflac?

Aflac is not a type of insurance that Dave Ramsey recommends; he even called Aflac snake oil on the radio.

Is life insurance needed after 60, according to Dave Ramsey?

Dave Ramsey does not have a specific age in mind, but he recommends investing in life insurance as soon as possible. The sooner you have life insurance, the more coverage you will be able to purchase. Additionally, the younger you buy life insurance, the lower your premiums will be.