One of the most ridiculous claims I run across when advising clients on their individual life insurance is "Dave Ramsey told me to never buy permanent insurance." I can not tell you how many times I have heard this, and it just kills me because it is so generic.
Life itself is very diverse. Last week my children caught a really weird green caterpillar with yellow "boots" and a pointy thing on one end that looked an awful lot like a stinger. After keeping it in a jar with holes poked in it for a two weeks, we were surprised that it kept ate leaves like crazy, but it would not go into the cocoon cycle. So, we researched what kind of caterpillar it was on the internet, and we discover that YES, it was a stinger with venom to ward off birds (who knew?) AND that it would only pupate underground. Despite the beautiful, strange caterpillar that it was...it was going to turn into a boring brown moth once it buried itself for awhile.
Like the weird green caterpillar, every person is living different lives with different goals and ultimately, different outcomes. Life insurance should be tailored to the life of the person(s) that it is insuring. AND, life goals can change!!!
I get Dave Ramsey's point: buy term and invest the rest. We all know term life is cheap. However, I can not tell you how many times I have seen the term on a life policy run out and then they become uninsurable and cannot buy any insurance when they could still use it and their "insurance investment account" wasn't cutting it because not enough time had accumulated. Good options at that point are cut to almost zero.
If you believe in this method, there are some great tools out there using Universal Life (UL) that can accomplish a similar goal and not jeopardize your insurance coverage. You can accumulate cash value, take distributions at retirement that are non-taxable, and lock in a permanent death benefit. Or, you can buy a UL policy that locks you in for the 10, 20 or 30 years you would have bought the term for and strip the premium to minimum to guarantee for this period. That way, if you are uninsurable at the end of this period, you still have the option to dump in some more cash and keep it going.
Regardless of what your life looks like, make sure that permanent life insurance is part of your long term retirement goals. Whether you're a moth or a butterfly, there is a strategy out there that works for you.
Life itself is very diverse. Last week my children caught a really weird green caterpillar with yellow "boots" and a pointy thing on one end that looked an awful lot like a stinger. After keeping it in a jar with holes poked in it for a two weeks, we were surprised that it kept ate leaves like crazy, but it would not go into the cocoon cycle. So, we researched what kind of caterpillar it was on the internet, and we discover that YES, it was a stinger with venom to ward off birds (who knew?) AND that it would only pupate underground. Despite the beautiful, strange caterpillar that it was...it was going to turn into a boring brown moth once it buried itself for awhile.
Like the weird green caterpillar, every person is living different lives with different goals and ultimately, different outcomes. Life insurance should be tailored to the life of the person(s) that it is insuring. AND, life goals can change!!!
I get Dave Ramsey's point: buy term and invest the rest. We all know term life is cheap. However, I can not tell you how many times I have seen the term on a life policy run out and then they become uninsurable and cannot buy any insurance when they could still use it and their "insurance investment account" wasn't cutting it because not enough time had accumulated. Good options at that point are cut to almost zero.
If you believe in this method, there are some great tools out there using Universal Life (UL) that can accomplish a similar goal and not jeopardize your insurance coverage. You can accumulate cash value, take distributions at retirement that are non-taxable, and lock in a permanent death benefit. Or, you can buy a UL policy that locks you in for the 10, 20 or 30 years you would have bought the term for and strip the premium to minimum to guarantee for this period. That way, if you are uninsurable at the end of this period, you still have the option to dump in some more cash and keep it going.
Regardless of what your life looks like, make sure that permanent life insurance is part of your long term retirement goals. Whether you're a moth or a butterfly, there is a strategy out there that works for you.