Dave Ramsey and His Ignorance About Infinite Banking, Whole Life Insurance and Permanent Insurance in General – The Dave Ramsey Brand Revolves Around Getting Out of Debt – November 29, 2023
The free market of ideas is a beautiful thing, and personally, I think Dave Ramsey has the legal right to LIE and mislead his listeners about life insurance to enrich his brand.
Why I say this is because the Dave Ramsey brand doesn’t revolve around LEVERAGE, which is one of the main reasons most of us purchase permanent life insurance, Dave’s brand revolves around getting people out of debt, and if you’re into infinite Banking, you’d know that Infinite Banking, Be Your Own Banker, this all revolves around how you think.
The average person doesn’t have to think for themselves; the average person wants someone else to do their thinking for them, and that’s where Dave Ramsey comes in.
Like it or not a whole life insurance plan can be a negative for some people, especially if they’re unaware of how great whole life insurance is. I know a lot of people who have whole life insurance plans and have NO IDEA. How good is their whole life insurance plan? Why? Because a lot of insurance agents don’t know, nor do they care about their clients.
If you have a great whole life or Permanent Insurance Plan and Don’t Know How to Use It, Does it offer you any value?
Primerica is a buy-term investment in different insurance companies that don’t focus on TERM-TO-100 life insurance; why? Because most customers in their younger years want to pay the smallest amount of premium as possible, now, obviously, this is a MASSIVE mistake, because whole life insurance is cheaper the younger you are and the younger you are hen you get WHOLE LIFE insurance the more money you can get and the more living benefits you can have.
But if LIVING BENEFITS aren’t explained to an insurance client, do they exist? The answer is yes, but if the customer has zero knowledge about the enjoyment of these benefits and that for example, PAYING BACK the policy loan is a smart idea, just like paying back any loan is a smart idea, well, then most insurance policy owners will cash out their whole life policy when or if they run into financial problems.
What makes Whole Life insurance loan policies so special is the compounding interest effect. If I buy mutual funds or some other investment, which could even include real estate, when I withdraw or repay the bank loan, my initial investment doesn’t continue to accumulate interest; furthermore, if I borrow money from a bank, I have to repay the loan on the BANK’s terms, whereas if I borrow money from my whole life policy loan, I repay my whole life policy on MY own terms, while the money I sent to the insurance company continues to accumulate interest.
Now, most people do not understand this, most people don’t understand CASH FLOW; this is something Robert Kiyosaki talked about in his book Rich Dad Poor Dad, Robert tells his readers to buy INVESTMENTS with insurance as well to buy POSITIVE cash flowing investments.
Now if this is all foreign to you, well, then Whole life insurance might be imagined as expensive life insurance; why not simply buy term and use the money to buy mutual funds? Well, if you understand the insurance you’re investing for the LONG TERM, instead of purchasing mutual funds, it would be SMARTER to purchase SEGREGATED funds.
I don’t know about now, but years ago Pimerica used to push the same narrative as Dave Ramsey, buy term invest in mutual funds, which sounds utterly ridiculous to me because mutual funds don’t protect your initial investment, segregated funds are basically mutual funds with insurance of principal/your initial investment.
So for someone like me, both Dave Ramsey and Primerica sound like pure evil; however, if your GOAL is to get out of debt, well, then the Dave Ramsey, and Primerica brand sounds fabulous.
It’s all about perception, and yes I’m aware that Segregated funds have higher management fees, but suppose you DIE, during a market crash? with a mutual fund, you’ll get nothing, whereas with a segregated fund, it’s an INSURANCE product and at the very least 75% of your initial investment would be protected.
The insurance companies I deal with have a 100% guarantee of principal, but I think the legal limit is 75%. So I believe Dave Ramsey has a light to push his biased agenda, I’m merely of the belief that it’s up to the INDIVIDUAL to find what they’re looking for when it comes to insurance.
Interesting times ahead