The Ramsey Show - App - Friday 6/22 Life Insurance Basics (Hour 1)

Episode Date: June 22, 2018

The show about you

🎵 🎵 Live from the headquarters of Ramsey Solutions, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. This is your show, America. Thank you for joining us. Open phones at 888-825-5225. That's 888-825-5225. Judith starts off this hour in Houston, Texas. Hi, Judith. How are you? Hi, Dave. Thank you for taking my call. My husband of 10 years passed away last month.

Oh, my husband of 10 years passed away last month. Oh, my goodness. And we were in the process of getting out of debt. We had everything paid off, cars, house, everything except for a personal loan that we were working to get rid of this year, which was $8,000. Now, I have the funds to pay it now, and so I'm going to pay that off here shortly. But my question to you today is what do i do with his 401k i i want to make sure that i make smart decisions moving forward with this money and since we were both young we weren't familiar with all of our options or anything like that so i just want to make sure that you know i make the right decision with this money. How old was he?

33. What happened? He just was, the doctor thinks that he had encephalitis, and so he was in the process of going to see a neurologist, and he had some testing that was due that week, and that morning of the test, he woke up in the middle of the night and shot himself. Oh, my Lord. So he wasn't in his right mind. He wasn't speaking or talking or anything.

And we were just trying to, we were doing the best we thought we could was to go and get him help. And that just was a shock for all of us. I'm so sorry. He was not in his right mind. He was a believer and everything, and he was very adamant about doing the Financial Peace University, which we went through last year, and he was very fond of your books and everything like that, so I just want to make sure that I make the right decision with his money. Sure.

Well, you're just reeling. What I want to encourage you to do, and I appreciate you asking, and I'll help any way I can, kiddo, but just make as few major decisions right now as you can. Right. Because, you know, you're just, I mean, this is just a horrible thing that you're going through. And just give yourself some space to do that without having to be a financial genius right now. Okay? But as far as a 401K, it's a fairly easy thing.

Were you named the beneficiary on this 401K? I was. Okay. Yeah, then you can roll that to what's called an inherited IRA and jump on SmartVestor and find the SmartVestor Pro in your area, and they'll sit down with you and help you do that. And there's no huge rush, okay? You've got, you know, sometime in the next month or so.

I mean, it's not like you have to rush out and you have four days to do this or something, okay? Yeah, when I went to his pension plan, I guess the office where they do all the pension plans and stuff. They were asking me right then and there what I wanted to do with it, and I just didn't know what to say. Yeah, just tell them you're going to roll it to an inherited IRA, and your broker will be in touch with them. And then sometime in the next few weeks, sit down with a SmartVestor Pro, and you'll select a couple mutual funds,

and they'll show you what you're doing. They'll teach you, and then you just roll it to that. How much is in that 401? $182,000. Pretty substantial. Okay. Yeah. That's good news.

So we suggest spreading it across four mutual funds. You remember that from Financial Peace University, I'm sure. Right. Growth, growth and income, aggressive growth and international. And that's what you'll do. But here's what you can do if you want to. It's up to you, okay? Sit down with SmartVestor Pro,

and if you don't want to dig into those mutual funds right now, you can just roll it to a money market account IRA and then select your mutual funds later if you want to. It just depends on how good you think your brain's working right now. Because if something like that happened in my family, my brain wouldn't be working good. Mine is not there at all. And even with the house, of course, my husband didn't have a living will. We were young.

He wanted to get in. And that was our next step. But we just never got around to doing it. And so the house, which has paid off, he bought it the year before we got married, he started buying it. And so, because in the state of Texas, he didn't have a living will. They were telling me that half of the house is mine and half of the house is his parents. Cause we didn't have any children together so um that was another issue but uh they went through i talked to an attorney and she told me something about an airship uh affidavit or something like that and so yeah

on top of the 401k you know i know there are a lot of big decisions to be made and and i just well what is his parents attitude towards all of that his father says that the house is mine um so you know they're willing to work with me i just don't know what all the steps are to go through that yeah good that's good news that's what it should be um i appreciate him being that guy and um just he can do a quit claim deed uh any rights that they have would be transferred to you and um you do need to see an attorney which you've already done about doing your probate stuff and that kind of thing but here's the thing try not to make any major decisions like investing into something or giving a big gift to someone or surrendering half of the house or something like that. The more you can put that off, the clearer your head will be.

Right. Because most people with grief, especially something sudden and tragic like this, the more distance you get between you and the event, the more healing that occurs for you. Right. And so the clearer your mind gets, that's just common sense. I mean, it's like going through a car wreck or something. You know, you just, you know, for the first day or two, you're kind of just in shock. And then after that, you kind of your body starts to heal. And in this case, it's your emotions and your spirit.

And are you are you plugged into a good church? I am. We attend Lakewood Church in Houston, Texas. So you've got some good folks. Yeah, that's where we took FPU. That's where we got introduced to that. So you've got some good folks walking with you then. We do.

I do. Good, good. Well, I'm so sorry. And let me do this. I'll put you on hold and we'll have Kelly pick up. We'll have one of. Good, good. Well, I'm so sorry. And let me do this. I'll put you on hold and we'll have Kelly pick up. We'll have one of our coaches down there sit down with you. But, again, even with that, just take your time. Don't wait two years to deal with stuff, you know,

but wait two weeks or wait a month or wait two months, you know, on some of these things. And any big decisions that don't have any kind of little technical pressure to get something done, wait six months. It's okay. Just give yourself some room. And you don't feel like you have to put on a Superman cape right now or a Wonder Woman shield to, you know, be more up to date, I guess.

But, you know, just give yourself some space, kid. And if you need some help, you call me back. In the meantime, we'll put one of our coaches in your life. It won't cost you a thing. We're going to take care of it. We'll cover for you. And then if you need me, you call me back, and I'll walk with you through this. I'm so sorry.

A humble thing to go through. Well, you don't get that on other shows. Common sense for your dollars and cents. This is the Dave Ramsey Show. Okay, I need you to listen to this. Because one normal routine that everyone does can cause total chaos in your life. I'm talking about the simple act of using Wi-Fi. When you're on Wi-Fi anywhere in public or at home, you're at risk of hackers easily seeing every site you visit

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Download it right now. Just search Hotspot Shield on iTunes or Google Play or go to hotspotshield.com. You can be secure in seconds. Download Hotspot Shield by Anchor Free today. Thank you for joining us, America. This is the Dave Ramsey Show. Samantha is in Boston. Hi, Samantha.

How are you? Good. How are you? Better than I deserve. What's up? Well, I just had a question. I'm starting a new job. I'm going to be making a little bit more money.

And I filled out the tax form that they have you fill out when you get a new job, so they know how much to hold out of your check. And the HR department called me and said, you're claiming way too many. You don't have six kids, so you can't claim, you know, six exemptions. Actually, that's not true. You can claim six deductions so she said that i was gonna like i was lucky that i haven't gotten audited yet no she's wrong she doesn't know she doesn't know what she's talking about she's an idiot okay so i called my tax professional and then they told me that i should only be claiming one. Why? Have you got... Okay, let's stop.

Okay. Number one, the law does not state that you cannot claim more deductions. My daughter, for instance, when she came out of college, my oldest daughter, Denise, went to work for a nonprofit organization. She was a single girl making, I don't know, what, $28,000 a year or whatever she was making, right? She claimed five. She did not even have a dog.

Okay. In order for her calculation to come out correctly, that's what she had to claim. And so the law does not say you can't claim more than the actual humans that you have in the house or something. What the law says is you have to have the proper amount withheld. And their calculations, their tables, they being the IRS, are so screwed up that you may very well have to do that to claim more than you have for it to balance. Now, your tax preparer saying you only need to claim one is a different issue. Now we're down to the common sense aspects, and what you want to claim is enough to have the proper amount of taxes withheld. Okay?

So what are you making a year? What's your gross? Well, let's see. This year, with the new job, I'll be making, hold on, I have it written down here, $38,000. Okay, so let's pretend, just make up a number. This won't be accurate, but let's pretend your taxes were $6,000 that you owe the IRS. Okay? Yep. If that were the case, that would be 20% or so.

All right, it's not going to be that much, but let's just pretend it was, because that's a round number. Okay, $6,000 is $500 a month. And so if you got paid twice a month, first and 15th, you would want to have $250 withheld from your check each time. So that when your tax bill comes due of $6,000, the proper amount has already been withheld from your check, you would get a refund of zero and you would owe extra of zero. Do you follow how I did that? Exactly, yeah. And so your tax bill annually divided by your number of pay periods is your proper withholding per period.

It actually has nothing to do with the deductions. Now, if claiming one deduction, as your tax preparer said causes that to occur then one is proper if claiming five causes that to occur then five is proper and that's all you have to be concerned about you don't want to over withhold which causes a refund which in essence you're loaning the government money and they give it back to you with no interest in April, and you get a tax refund, and everybody goes, whoo-hoo, like Santa Claus lives in D.C. or something. It's your freaking money they already took from you.

They just gave you some of it back and make us celebrate the fact. So no, we don't want to do that. But on the other hand, you don't want to end up owing $2,000, making $38,000, and that would put you in a real pinch because you claimed too many deductions. So now that there's a big dispute with your particular check then ask HR or your tax preparer how many deductions you need to claim to cause that to occur. Okay. Yeah, I think they're both giving me bad information. I think so.

Because last year I claimed six, and I still got a refund. So this year I'm going to claim seven. I think you are right. I think your HR girl, hr girl is just whoever it is it's just she didn't know what the flip she's doing okay all right because the law what you don't want to do is under withhold you will get penalized that would be correct information you don't want to over withhold because that gives you a refund last year you got a refund now last year you made what last year i made 34 000 this year you're gonna make 38 000 and you got a two thousand dollar refund last year claiming five has anything else changed in your life number of dependents did you

buy a house um other than the job no just um my child care expenses went up, so I'm expecting that that will affect the taxes somehow too. Possibly, depending on whether you're taking a standard deduction or whether you've got a write-off on that. Okay, so you can challenge your tax preparer to actually do their job rather than just throwing out a number, and then you can call the little HR lady and just say, thank you for your help. You're just wrong.

I'm going to claim what my tax preparer and I calculated, and you put that number of deductions down. If you can't get your tax preparer to do their job, then go to DaveRamsey.com and click on Tax ELP and find someone to help you with your taxes that actually knows what they're doing and cares. All right, Christine is with us in Salt Lake City. Hi, Christine. How are you? Hi, Dave. I'm great.

How about you? Better than I deserve. What's up? Well, my husband and I are in a debate because we've been paying my mom's term life insurance now for 16 years, and it went up last year from $260 to $400. We just got a letter that it's going to increase to $700. Per year? And we're about per year, per month.

Per month? Yeah, per month. $700 a month? $700 a month. For how much term insurance? $100,000. And how old is she? She's 75, and she's not in very good health, but she hasn't been in good health for quite a while.

All right. And she's spending like $8,000 a year. We're into it for about $50,000 right now. I don't care what you're into it for. So my husband thinks, yes. What you're into it for is not relative. My husband thinks we should just cut our losses. Yeah.

Yeah. What you're into it for is not relative. We should just cut our losses. Yeah. Yeah. What you're into it for is not relative. All that's relative is the future. And, you know, it's not about what you paid for it so far. It's about basically you're the beneficiaries, and she doesn't need the life insurance. The only question is you've been paying it to cash in on her death, right? Yep. Yeah, it's kind of cold, but, I mean, that's kind of the only question is you've been paying it to cash in on her death, right? Yep. Yeah, it's kind of cold, but, I mean, that's kind of the way it is.

Well, we had the opportunity to get this good life insurance term life when she was 58. Yeah, it wasn't. It's never been good. You never buy insurance to cash in on it, but you're there now. So the question is, do you spend $ dollars a month and uh in order to try to get a hundred thousand and regardless of how much you put in on it um and and you know the answer is how long is she going to live and we don't know obviously we don't know so if you thought she was going to make it two years then you would spend eight thousand dollars a year for

two years but if you but you know pretty quickly that's going to go away um yeah you know unless she's you should take the money and invest it unless she's pretty ill i'm going to take the money and invest it okay um because i just i mean obviously if she dies within one year i'm being cold here at your mom i'm sorry but we're doing math okay right so you're you're pitting you know seven seven hundred dollars a month eight thousand dollars a year against um a hundred thousand for one year that makes sense for four years it doesn't make any sense at all because now you're really betting so i don't know how long you know if she lives five months you're gonna feel stupid for having canceled it. But I would have never done the deal in the first place.

So if I woke up in your shoes, I would probably cancel it and just start investing and not worry about it. Again, unless she's got a terminal illness, you have a more predictable pattern here, which would be sad. But that's the situation. Again, how we talk about it is kind of weird when we're talking about mom dying to make money, but I really wouldn't keep it unless her health is

just failing rapidly. I really wouldn't keep it. But again, part of that's based on I wouldn't have been in this deal in the first place. It's not money you should have put in it. This is The Dave Ramsey Show. deal in the first place. It's not money you should have put in it. This is the Dave Ramsey Show. Are high health care costs getting you down?

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And our members have shared over $2.5 billion in medical bills. To learn more, visit chministries.org. That's chministries.org. Christian healthcare ministries is a proud sponsor of Dave Ramsey Live Events. chministries.org. Thanks for joining us, America. Cody and Bethany are with us in Fort Smith, Arkansas. Hey, guys, how are you?

Hey, Dave, we're doing good. How are you? Better than I deserve. I see on my screen you're debt-free. Congratulations. Yes, sir. Thank you. A lot of hard work. I bet. How much have you paid off? We paid off $138,000 in 50 months. Good for you. And your range of income during that time? We started at $108,000 combined, and now we're up to $180,000.

Goodness gracious. What do you two do for a living? We are both occupational therapists. We have our master's in occupational therapy. I work part-time at a skilled nursing facility. And I work for a home health company. Very cool. You guys are killing it.

Way to go. So I'm guessing with two occupational therapists that $138,000 might have been student loans. Yes. $90,000 with student loans, $38,000 with car loans, and $10,000 credit cards. Wow. Very cool. And it took you four years or so about. Yeah.

Okay. Roughly. Very cool. So tell me the story. What happened? So we graduated from occupational therapy school five years ago, and we were given the FPU CDs from Bethany's brother, and we listened to them all the time during trips,

and that's how we were introduced to your plan. We were able to later take the FPU, and since then I've been able to coordinate one FPU class. Well, thank you. Very cool. I appreciate you leading the class. That keeps you on track when you're making other people do it, right? Absolutely.

Yeah, and I love to spread your teachings. I mean, you've helped us tremendously, and we're very gracious for it. Yeah, I'll add, at the beginning of the 50 months, we were following the baby steps, but we weren't really doing it as intensely as we probably should have. And it was about three years ago when we decided we wanted to grow our family. We really just got our act together and turned up the intensity on the baby steps. When we did become pregnant, we pressed pause on our baby steps just to save up cash for all medical expenses. And then after our son was born, we jumped right back in. And here we

are today. Way to go. Well, you paid off $138,000 when someone in your class or somewhere else says, how did you do that? What do you tell them the keys to getting out of debt are? So for me, you have to have a goal. My goal is to always be debt-free by 30. I sent our last payment to student loans in March, and my 30th birthday was in May. Yay! Beat it by two months. Also, I use the progress chart from SPU, and every time we send another payment in,

we have another tally mark there and just watched it go down and down and down. Yeah, and just communication was really key for me, and we started using the EveryDollar app budget whenever it came out, and just really trying to stick to that and just communicating was probably the biggest key for me and just making sure that we were living beneath our means love it love it way to go you guys very well done how's it feel oh it's a relief it's crazy it's a huge huge weight off our shoulders and we're have all the income now to change our family tree yeah you do very cool very cool and you had the baby three years ago as a boy or girl well we actually had him 18 months ago but three years ago is when we decided

we definitely wanted to grow our family and but we have a boy okay jack and he's uh he's 19 months awesome very cool life is good 30 years old baby's running around, no debt running around, life is good. Income's great, life is good. Definitely. Man, this is just perfect. Thank you, guys. I'm so proud of y'all. Did you have more cheerleaders or people telling you you were crazy? No, I mean, we had great support.

Our family was always very supportive. We have a family full of therapists, and so they all kind of understood, you know, the student debt. So I feel like we had wonderful support in that area. Very cool. Very cool. So did you two meet in therapy school? We did, yes. Okay.

And we got married right, well, towards the end of therapy school. Just as you're graduating. Okay. Perfect. Good job, y'all. Good job. Well, we got a signed copy of Chris Hogan's number one bestselling book, Retire Inspired, for you.

We want that to be the next chapter. Thank you, Fred. Yeah, we want that to be the next chapter in your story. You want to be millionaires now and calling in on the millionaire hour and, of course, outrageously generous along the way. That's your position to do incredible stuff. You've learned to control money. You've learned to communicate.

And you don't have any payments, and you make $180,000. Life is pretty good. That's just a good place to be. So you guys are in unusually strong positions. So very well done. All right, it's Cody and Bethany, Fort Smith, Arkansas. $138,000 paid off in 50 months, making $108,000 to $180,000. Count it down.

Let's hear a debt-free scream. Three, two, one, we're debt-free! I love it! Very well done. Very well done. Very well done. Now, we don't have any requirements that you've been through Financial Peace University to do your debt-free scream. We don't have a requirement that you bought a total money makeover book to do your debt-free scream. You can just listen to the podcast and have done the stuff we teach.

We don't require that we took money from you to do a debt-free screen. If you want to do your debt-free screen, there is a waiting list, and you need to go online at DaveRamsey.com and click on the show, and then there's a place there for you to fill out under the Dave Ramsey show. To fill out, and Kelly will get in touch with you. And, you know, you can't continue to be using debt. The point is to teach people to be out of of debt and so I still use my credit card well you don't get to do your dadgum debt-free scream you're too stupid so that's not how this works the point is to teach people to get out of debt and

stay out of debt so that that's the stuff and Kelly's gonna screen you for that kind of a thing but we don't require that you know you went through Financial Peace University an interesting number of people now have coordinated Financial Peace University I don't know if y'all notice that if you listen every day the number of debt-free screams that someone went through the class they read the book they listen to the radio they read the book they ended up going to class and then somewhere in the three years or two years they're working their way out of debt they end up coordinating a class because that way they stay plugged into the material. And that accountability, that encouragement of being around the whole Financial Peace University system

is a part of the equation for a large number of people that have this win, this debt-free scream win. So you hear that a lot. And, you know, if you drive down your street, you find the opposite. Count ten houses. Seven of them have too much down your street, you find the opposite. Count ten houses. Seven of them have too much month left at the end of the money. They're not having fun. Seven out of ten Americans are paycheck to paycheck. All the money comes in, all the money goes out.

Only the names were changed to protect the innocent. But you don't have to live like that. If that's you, if you're one of those, that does not have to be your reality. That is a chosen reality, and you can choose to make different decisions and choose a different reality. Leaders are not born. People choose to become leaders. You're not born, and they go, oh, that's a rich man, unless he was born into a rich family and it wasn't a rich man. Anyway, it was a baby.

It was a rich baby, but the baby hadn't done anything yet. But wealth, by and large, for most people, 88% of Americans are first-generation wealthy. Nine out of ten, almost, are first-generation millionaires. So it's a series of choices. And we've now had about 5 million people go through Financial Peace University and about 50,000 churches now over the last 20 or so years. And the vast majority of those in the last 6 or 8 years, actually.

And so what we're seeing is generations now, their kids are now coming up and in their 20s and are out of debt and doing their debt-free screamer. They married somebody that had some student loan debt, but the other one, mom and dad didn't have any debt, and they worked it out. So if you want to learn about Financial Peace University, getting in a class or starting a class, just click FinancialPeaceUniversity at DaveRamsey.com or call us at 888-22-PEACE. It is the premier class in America today for learning how to handle money, learning how to become wealthy. And of course that includes getting out of debt. Of course that includes getting on a budget. But that's just how you do it so that you become wealthy, so that you change your family tree,

so that you're able to be outrageously generous. Financial Peace University. This is the Dave Ramsey Show. I hate to see people waste money, and that's exactly what happens when you spend hundreds of dollars a year on ID theft protection plans like Trusted ID, LifeLock, ID Watchdog, and any of them. Well, let's face it. Identity theft is a nightmare, and it's not going away, but there's no need to freak out and buy the most expensive plans out there because you think you're getting the best protection. Wrong. I've been telling you for years, you need to protect yourself, and Zander's ID Theft

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Dave, I have a whole life insurance policy with zero cash value due to the loans as advised by my agent. Now I realize this was dumb since I owe premiums plus interest every year. So am I still on the hook for the policy loans if I forfeit the policy and buy term? No. You would buy term insurance, go to ZanderInsurance.com, get your term insurance in place first, and then when you cancel the policy, your cash value will offset your loans, and they will not loan you more than your cash value. So likely that you actually do have a cash value that is above your loan amount, so you'll probably still get a little cash back.

They very seldom will loan you 100% of cash value. But if they have, it'll be an exact break-even, and just canceling the policy means you cancel the interest, cancel the premiums, and your set of assumptions are correct. You got screwed over. Really bad advice to buy the policy, and even dumber advice to clean the whole thing out and sit there and pay interest to borrow your own money and pay a premium to keep the loan open.

It's just disastrous. Yeah, go to Zander Insurance. Get you some term insurance. We recommend 10 to 12 times your income on you on a 15 or a 20-year level term policy. During that 15 to 20 years, of course, you build wealth and get out of debt. So you got a big pile of money and no debt, and the kids are grown and gone. Then you have very little need to no need for life insurance. Adam's with us in Houston, Texas.

Hey, Adam, how are you? Well, I'm actually scared right now. How are you doing, Dave? Better than I deserve. What are you scared of? Well, my wife and I are talking about having a second child, and I don't know if it's the right time with where we are and our debt snowball. Are you working on getting out of debt?

We are working as hard as we can, yes. How much debt do you have? About $53,000. Correct. And you make what kind of household income? Just under $105,000. Good. And what kind of debt is the $53?

Uh, one car, credit cards, and medical. How much is owed on the car? $16. Okay. And how much debt have you paid off so far? We've paid off about $7. How long did that take? Uh, about four months. Okay.

So in two years, you would be debt-free at the current rate? Mm-hmm. Okay. And why does that mean you can't have a baby? We both suffer from quite extensive medical, and it just scares me even during the pregnancy. You both suffer from quite extensive medical. You've got medical issues. Correct.

Health issues. Okay. Yes. And that affects her carrying a child? Yes. Okay. And what does she make? About 46.

Okay. Of the 105 you said, right? Okay okay so you make like 65 okay or 60 okay um okay well i mean i i don't tell people to not have kids because of that i don't do that okay um i don't think you've anything to be terrified of here and i wouldn't say oh don't do that, okay? And I don't think you have anything to be terrified of here, and I wouldn't say, oh, don't do it. I think you're crazy. You know, I'm not going to say that because I don't believe that in this situation. I think because of the health concerns, she could end up not missing eight weeks of work with a normal labor and delivery. She could end up missing nine months of work. Right. Because she might have to, you know, I don't know,

have some kind of a situation where she's not working because of health with the pregnancy to protect the baby. So what happened last time? Our first child, she had to go on permanent bed rest at two months. Yeah, so she missed seven months of work, plus two after delivery. So she missed nine months of work. Okay. after delivery. So she missed nine months of work. Okay. Yeah, I mean, that's a valid concern.

That's a long time in your situation. Do I want to wait a full two years before I start that process? No, probably not. But I might want to make a little more progress if I were in your shoes. But I'm not saying you have to do that. I'm just saying you have properly analyzed and said, hey, there's a mathematical risk here that we're facing because you're probably not going to make a ton of progress on your financials

if she's on bed rest. Right. You're probably going to tread water during that time. And so you're kind of putting all this on hold. So, again, I might like to say if I wanted to get rid of like half of this and then we'll do it, you know, like maybe sometime next year. But just because I'd want a little bit more of this behind me, get a little more of the strain off the family probably.

But I don't think it's like, oh, you go bankrupt you're this is screwed up no it's just how quickly and i'm just kind of weighing out it's just the speed at which you get out of that right and your current child's age is what six six okay all right so it's not like we've got a two-year-old and we want to make sure they're close together or something. Right. It's been a while. Okay. Because of the fear of the pregnancy.

Yeah, yeah. But would I permanently not do it? No. I think you need to have another child if you want to have another child. I'm in with that. I love babies. I think they're awesome. I've got grandbabies, and if I'd have known how great grandbabies are going to be, I'd have been nicer to their parents. I mean, it's a wonderful thing.

So, yes, have a baby. The only question is whether to have it now or have it when you get halfway through this dead snowball or wait all the way through, which might be a little bit of an extreme. Then at that point, you've got an 8-year-old, 9-year-old before the baby comes. And so, you know, you do what you want to do in there but i i don't want to have fear to the point of saying don't do this it's just a matter of if you do it as you have correctly analyzed you're going to have some delays in your debt snowball process and and that's fine that's okay tia is with us in miami hi t Tia. How are you? Hey, Dave.

Doing great. How are you doing? Better than I deserve. What's up? Well, we're just so grateful for you, and we're excited to get our son on your middle school program as well so he can be raised debt-free. I just did your online course, and before I learned about your courses, we had started through kind of overhauling our insurance policies and found an insurance agent. My husband has an old whole-term or whole-life policy that he got decades ago. It has a cash value of around $60,000 right now.

It's a $200,000 policy. And we did a supplement term policy with the insurance agent. And then I started reading and learning all about your recommendations. And I asked him about that whole policy. We're on baby step two right now, so we've got some debt. You asked who about it, the agent or your husband? Well, the agent. And, you know, we're following your program.

And I asked the agent, I said, you know, this is what Dave Ramsey says about whole policies, cash out, you know, increase the other policy, the term policy, and then cash out of the whole life one. And he said not to, that it really doesn't apply to us, just leave things as they are. Yeah, I bet. Yeah, because guess what insurance agents get paid on? Premium. They get paid on the premium. Yeah. Did you notice that the term life premium

is a whole lot less than the whole life premium? Yes. Yes. What you need is a new insurance agent. No, I'm not kidding. Well, what do we do about the policy that we just signed? Well, you may not even need it. You're probably paying too much.

What company is it with? Thrivent. Oh, okay. Yeah, you can beat that. Go to ZanderInsurance.com and run a quote out for the supplemental plus $200,000 and compare that to what they're talking about charging you for the term and for the other. No, I mean, of course a whole life agent is going to tell you, no, it doesn't apply to you.

You need a whole life because they want the premium. They want the commission on that. So I think you need a new life insurance agent for sure. And I think you can destroy the term price that they gave you by going outside of that company and going to Zander Insurance and shopping among a bunch of different companies. So that's what I would do. I'd get term insurance for the proper amount, you know, 10, 12 times his income on him,

10, 12 times your income on you, and I would completely cancel both of those other policies. And I think when you price it out, you'll see exactly what I'm talking about. You're going to go, oh my goodness, this sucks. Because it does really badly. Horrible product. Absolutely horrible product. And yes, your situation does apply. Unless you're terminally,

unless you're ill and can't get insurance. Unless you're ill and can't get insurance. Otherwise, you can get rid of that crap. That puts this hour of the Dave Ramsey Show in the books. Hey guys, this is Blake Thompson, Chief Production Officer for the Dave Ramsey Show. Here's a tip. To keep from missing Dave's classic facial expressions to some of those calls, make sure you watch him live. Just visit DaveRamsey.com slash show each day from 2 to 5 p.m. Eastern.

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