Dave Ramsey and Suze Orman Are Wrong About Universal Life Insurance

Dave Ramsey and Suze Orman have made reputations for themselves based on their strong opinions. One of the areas they both are very vocal about is their support of term life insurance and their strong opposition to whole, permanent, or any kind of cash value life insurance.

The biggest argument against permanent life insurance is based on the fees associated with the policies. Dave Ramsey says that cash value plans are “just a waste.” He goes on to state that “if you need access to the savings in your policy you have to borrow it and pay interest. When you die, the insurance company pays your beneficiary but keeps your savings.”

Suze Orman, in this video (http://www.youtube.com/watch?v=d15wxr1vqyM), states that whole life insurance should only be purchased based on financial loss due to the death of the insured. She urges her callers to cancel their whole life insurance policies, put some of the money into a term life insurance policy, and invest the rest of the money in some other way.

These are very valid arguments against cash value life insurance policies, but perhaps Suze Orman and Dave Ramsey would change their minds if they if they knew about a new type of whole life insurance policy. Rather than calling all permanent life insurance policies “stupid,” perhaps the truth is that these two financial experts are themselves ignorant of all the options available.

Are David Ramey and Suzie Orman hurting people by discouraging everyone from purchasing life insurance policies with a cash value option?

An example of a cash value life insurance policy that is within the bounds of Dave Ramsey and Suze Orman’s restricts is Genworth Financial’s new universal life insurance policy that adds another variable for customers to control the premiums they pay.

Typically life insurance plans combine insurance coverage and tax deferred savings, but they cost more than the popular term life insurance. With this new universal plan the insured are allowed to guarantee the death benefit payments up to age 110.

The life insurance industry is changing all of the time and it is understandable that financial superstars like Ramsey and Orman would need to adjust their stances on life insurance policies as these areas expand to meet the growing demand for customizable policies.

So who is right? Do you agree with Dave Ramey and Suze Orman? Or do you think they’ve been riding the high road a little too long and it’s time for them to reassess their stances on cash value life insurance policies. Take our survey to make your voice heard!


1 reply
  1. Richard Stampley
    Richard Stampley says:

    When a policy states in the contract that if you pay your premium but your cash value is zero after years. How can that be a good product?When the companies hide in fine print the charges they can charge you how is that a good product? When the company makes it so complicated that it is impossible to know what you cash value amount is, and even harder to figure out what it will be at anytime. How can that be a good product. An Executive of a Texas Life insurance company was quoted in a Texas Continuing Education course for universal life that ‘ life insurance is so complicated that consumers cannot understand all the nuances. In fact even agents cannot understand the product ‘. How can that be a good product?
    What really amazes me is that an insurance agent that gets paid for selling the most expensive highest commission product would dare to complain financial coaches that do not get commission from ANY life product saying they are unfair and misinformed.

    Reply

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