Why Do Suzie Orman and Dave Ramsey Trash WL So Much?

"In general people can get better value for their buck with Term. "

Depending on their needs and time frame. There is no one product fits all cases.

If you live too short, term is a wise choice.
If you live too long, WL or Gul are better choices.
the problem is at the time we make the decision to buy, we don't know.

Better for an agent to have multiple products to offer a client, because if you don't, someone else will.
 
I think Suze is or was affiliated with Metlife-check Cali DOI. Also I'm sure Dave gets some pretty nice "kick-Backs" from his "recommended" Term provider.

BTW, I wonder if Mr. Ramsey is writing a new book for all of us in middle America? It sure seems he needs to restructure his 10-12% market return theory/system. What year was that book published?

They all have an agenda, they all have advertising sponsors who they shill for, etc etc. Suze, Ramsey, Ric Edelman, Bob Brinker, etc.

Brinker's show has him shilling for mutual fund companies and he tediously drones on about the Fed.

Ramsey's get out of debt stuff is good but it is just a vehicle to sell his other stuff. Almost anyone can get on CNBC and Fox Business for interview segments if you pay a PR firm or have the right connections.

Ramsey was claiming people can get 10 to 12% in the marke in a book? LOL! If you stay invested about 100 years in mid/small cap index and exit in a bull cycle.
 
I think I can claim to have handled more death claims than the average agent. I would estimate that it's several thousand.
The term life claims are VERY rare. They are on higher amounts but always on someone who dies young.
I probable help with at least 50 whole life claims to every one term.
 
I have whole life and I expect my wife or children to collect on a claim someday.
 
I don't. I'd rather spend the difference. I'm the one earning it, not my son. I don't want anyone to bear the cost of my funeral but aside from that my son can make his own money. I hope to die dead assed broke after 50 expensive trips around the world.

I have life because my wife doesn't work. If my wife was making great money I would probably only have burial insurance.
 
I don't. I'd rather spend the difference. I'm the one earning it, not my son. I don't want anyone to bear the cost of my funeral but aside from that my son can make his own money. I hope to die dead assed broke after 50 expensive trips around the world.

I have life because my wife doesn't work. If my wife was making great money I would probably only have burial insurance.

I have the whole life because I wanted to insure that my wife never has to work at Walmart IF SHE DOESN'T WANT TO if I die before she does. She has been for the most part a stay at home mom all of our marriage and I have never worked at a job long term that provided any good benefits. At the current time it appears that our business investments will provide an adequate retirement income but just in case something goes wrong or I die too soon I have the insurance. I didn't do it for the kids but they will stand to inherit a substantial amount of money if neither of us out lives the other by very much but that is o.k. because I love my kids.
 
Ummm, yeah - that's why I have a mill in coverage - so my wife doesn't have to work at Walmart if I die. Doubtful she'll have to work at Walmart after I'm 70.

And I love my son too - which is why I'm gonna teach him to work his ass off instead of waiting for me to die so he can "be rich."

Unfortunately I've seen what inheritance has done in the case of three very close friends and one in-law. In all 4 cases it has destroyed the family.
 
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The two of them pander to a crowd who feel as thought people who work in the financial services industry are merely servants who assist them in getting where they need to be. Dave and Suze both have books to sell and air time to fill, so part of what they do involves casting a shadow of doubt on financial service professionals because if people found out that you or I could give them all the financial advice they could stomache for free they'd soon start questioning what's the point of spending another 25 buck on their latest books. Ever wonder why they write so many of them so frequently?

They've both shown on several occassions their lack of understanding when it comes to specific financial products.

Here's a few examples:

Suze was onced asked by a caller if he should put money into a $500,000 WL policy, the caller was 31 years old and the premium was going to be $14,000. Suze went on an anti WL tirade and told the caller to buy a 20 year level term policy for 20-30 dollars per month. She then asked the caller if he had any idea how much the agent recommending this policy would make in commissions, and informed the caller it would be around $10,000. She also informed the caller that she is a licensed insurance agent and licensed in every state except Hawaii because she doesn't want to fly out there and take the test.

The first red flag for Ms. Orman should have been $14,000 for $500,000 at 31. Even if this were an NML proposal, it's easy to quickly see this is an overfunded policy, actually to about the MEC limits. Meaning the agent was recommending a policy that would be loaded up with extra cash. Of course, you'd have to understand the product to pick up on this, which she obviously doesn't.

Second, her suggestion that the agent would receive $10,000 in commissions is off base even if the base premium was $14,000. Commissions rates for WL contracts are between 50 and 55% of base premium meaning somewhere between 7 and 8 grand even if it were truly a 14k premium.

Lastly, I think we all know how ridiculous the Hawaii comment is, I could get licensed in Hawaii right now if I wanted, and it wouldn't involve a plane ticket or a test.




On CNBC once, Suze was attacking variable annuities, when suddenly a caller asked what she would have recommended as an alternative. The situation was the caller's husband had rolled his 401k into an IRA funded with a VA a few months prior, the market tanked, he died, and the return of premium death benefit kicked in and his wife (the caller) received the entire original purchase amount. Suze went on to say that in those circumstances it makes sense. She said that after asserting that you should never own a VA and that they are worse and more evil than bond funds. By the way, she hates bond funds because she thinks the people she sold bonds to in the 80s are still getting a 15% yield on those bonds.

Dave once stated that someone who makes $40,000/year saving 15% per year would have between $500,000 and $700,000 in 20 years. Let's assume it's a 401k with a match of 3% and fees magically don't exist. To get to $500k you'd need an 11.68% rate of return and 14.56% for $700k...good luck with that.

Dave went on to illustrate the idea of self insuring (that theory of decreasing responsibility nonesense). Let's overlook the fact that his rate of return is way overstated and pretend for a minute that it actually happened, the investor managed to get that $500,000 dollars. The original age in this case was a 32 year old. Now let's say he dies at 52 and leaves the wife $500,000 from the 401k but sadly no life insurance because things were paid off and all that happy jazz.

What's the taxability of funds paid to a beneficiary from a qualified plan? 100% taxable income. Meaning $500,000 isn't really $500,000, or but in another way, your share of this thing isn't $500,000. And, let's not forget the fact that the wife may live to normal life expectancy, and if she's using what once was supposed to be money saved for retirements to make up a loss in income from the husband's death, it isn't going to grow as planned.

He then goes on to say he has term insurance mostly for estate planning purposes :huh:

In his book he talks about WL in the most simplitics of terms, and conveys a real misunderstanding of the product.

So again it comes down to a real basic principle, they don't really know what they are talking about.
 
Ummm, yeah - that's why I have a mill in coverage - so my wife doesn't have to work at Walmart if I die. Doubtful she'll have to work at Walmart after I'm 70.

And I love my son too - which is why I'm gonna teach him to work his ass off instead of waiting for me to die so he can "be rich."

Unfortunately I've seen what inheritance has done in the case of three very close friends and one in-law. In all 4 cases it has destroyed the family.

You do realize you can name someone other than your son as beneficiary, right? Do you have a charity that you care deeply about? How about setting up a scholarship for your alma mater? I mean, I'm single, no kids, and I have a WL and term policy on me for $1mm. It's because life changes, I know someone will depend on me sometime in the future, but if that never happens, I know I will care about something deeply enough to make an impact when I'm gone.
 
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