Posts filed under 'Dave Ramsey'
I’ve never been seen smoking and I suspect that Dave Ramsey isn’t real big on the habit either, but after spending the last year and a half immersed in Dave Ramsey through his Financial Peace University, I am convinced that Dave Ramsey wouldn’t want to monetarily punish smokers for their choice.
I think it’s safe to say the Dave is the best known and most listened to debt reduction advocate out there today, far surpassing those who seem to kind of flit around the periphery like Suze Orman. Dave’s messages stay consistent. They are no nonsense and meaningful to me, they are sound from a biblical point of reference.
Dave has recommended a nationwide agency, Zander Insurance, for some time. Quoting him on Zander’s home page, “Four generations and 80 years experience, unparalleled commitment to service, the best products on the market, and a principled commitment to debt free strategies, are just a few reasons I trust, use and strongly recommend Zander Insurance.”
Having learned and taught Dave’s debt free strategies I find it more than a little troubling that, using myself as an example, if I were a smoker and took Dave’s advice to use Zander life insurance, I would pay nearly $1200 more per year for a $500,000, 20 year term insurance policy than I would through most other nation wide agencies out there. Zander’s website quotes my best rate in this scenario as $6295 a year from Transamerica, while our website and many others I checked quote $5100 annually with Liberty Life. I believe that Dave might characterize that kind of unnecessary expense “a stupid tax”.
I emailed Dave on his radio show and also sent this email to his info@ address. ” I’m a life insurance agent and agree with your philosophy on term versus permanent insurance, actually have since well before I ever heard of you. Been through FPU and am facilitating FPU at my church right now. What a life changer. Not debt free yet, but well on our way.
My question is why Zander when they clearly don’t offer the best value in term insurance in many cases? If you bought from them and then found out you could get the same amount and term length for $1000+ a year less with a company they didn’t quote, would you be OK with that?” I really don’t expect a reply on his radio show, not because he wouldn’t want to talk about it but rather because there are who knows how many thousands of calls and emails to him daily. What are the chances?
I did receive a response from his customer care folks and was told “About your insurance questions, Dave has been working with Zander for many years now. They have been in business for several years as well. Four generations and 80 years of experience…they offer the best products on the market and have a commitment to debt free strategies (which is what Dave teaches). Dave strongly recommends them and personally gets his insurance through Jeff Zander. This is the only insurance company that we endorse and recommend not just because of their excellent commitment to service, but because they provide the most informative access that our customers and listeners need—when it comes to insurance. They are not only committed in providing excellent service to us (our team members) and families, but to our customers and listeners as well. This is who we recommend and endorse.”
I emailed back and thanked them for the response but suggested that my question really wasn’t answered. The question really went to whether Dave was aware of the fact that Zander had made an administrative decision to charge far more than necessary in some cases. The answer I received was to contact Zander if I had questions concerning their term insurance plans. Quoting Zander insurance from their website, “GREAT RATES AND GREAT SERVICE. A strong statement we know, but with Zander’s 80 years experience and our arsenal of term life insurance plans, we know we can deliver. We understand the importance that term life insurance provides to a family’s financial future. We also recognize that it is just one piece in your financial plan and needs to be the most cost effective option allowing you to focus on debt reduction and wealth accumulation strategies. It is the balance and commitment to these two principles that define our mission to help you succeed in your goal of financial peace and independence.”
Bottom line. I write all of this because there are so many agents and agencies that really do embrace Dave’s beliefs and really do more than lip service to “providing the most cost effective options”. I’m not suggesting that Dave endorse me or any one other than Zander, but I am suggesting that when a person has millions of followers they should stand ready to take those they endorse to task when they fly in the face of deeply held beliefs and philosophies.
June 1st, 2009
I will tread carefully with this since the last time I questioned Zander Insurance, well, frankly I kind of over stepped my point and pounded on them a bit. I publicly apologized and we all walked away feeling OK and deciding that while we both believe Dave Ramsey is right on the money, Zander does business a little differently than I do.
A friend pointed out to me that Zander’s website had a few errors on it. I looked at it and decided that was no big deal. On one page they quote rates for a company that no longer sells insurance. US Financial hasn’t written business in a few years and it was just their rate on a child rider so really, as I said, no big deal.
While I was there though I decided to dig a bit like we all do to each other’s websites (checking out the competition), and I ended up on their tobacco use page. I ran rates on myself as a smoker since Zander stated that “Many of our competitors simply treat all tobacco users the same eliminating any potential savings but we have companies that offer competitive preferred tobacco.” The best rate they showed was Transamerica at $6295.00 annually.
I then ran the exact same scenario on our website and found both Liberty Life ($5210.00) and Western Reserve Life ($5375.00), around $1000 a year less. Let me just state for the record that “Many of our competitors simply treat all tobacco users the same eliminating any potential savings, but we have companies that offer competitive preferred tobacco rates.” And these aren’t impossible to get fantasy quotes. Both of these companies have been kicking everyone’s rear end for some time in the preferred tobacco arena.
Bottom line. Zander is a fine agency and they made a case the last time we conversed that they don’t do business with some companies for administrative reasons. And I respect their decision. What I don’t respect is them indicating their competition is doing something bad when their accusation should be spoken into a mirror. Personally, administrative reasons or not, I’m thinking Dave would have a problem with the fact that Zander isn’t really offering people the best option for their hard earned dollar. Dave busts his rear getting those dollars freed up after all.
Just an aside. I am currently facilitating a Dave Ramsey Financial Peace University, which I’ve been through myself and highly recommend to everyone. Dave admits freely that he doesn’t sell insurance so his opinion isn’t biased and I agree with Dave’s philosophy on the best way to buy and use term insurance. I know I’ll get yelled at for this, but personally I think Dave has placed a little too much trust in Zander in the life insurance arena. So, holler away!
May 28th, 2009
There are days that stand out for me in life. My marriage. The day I gave my heart to Jesus. Each day that I have been able to deliver a death benefit check to a family of a client.
There are people who touch me and make a difference. Today I had an opportunity to share prayer with an 80 year old life insurance client of mine who’s business has been rocked by the recession. Imagine! 80 years old and still working everyday and living life the way you should, being honest and playing by the rules, and getting your tail kicked anyway. I can’t even begin to explain how this hurts my heart. All I could do was listen, pray and then put him in touch with a Dave Ramsey counselor. I feel blessed that I could be there for him when he needed someone to talk to.
There is a blessing that comes from no where, well of course from God, but seemingly out of the blue. There are moments or even something on internet that gives me hope.
Bottom line. I am humbled by life.
April 29th, 2009
I’ve shared my opinion plenty of times, the fact that I believe that 95% or more of life insurance needs for the average people out there are term insurance needs. There is no reason to be buying whole life, universal life or variable universal life.
Dave Ramsey doesn’t mince words when it comes to this topic and I admire him for that. Too many dance around the periphery and never nail down exactly what they believe in. To put it bluntly, whole life or universal life eat up an inordinate amount of money on a cost per thousand basis. It costs more for each thousand dollars of life insurance you want to leave your family.
That being said, the more you spend per thousand, unless money is just not an issue, the less life insurance you will be able to buy. At age 40 $500,000 of 20 year term insurance at the best rate class would cost about $430.00 a year. The same amount of whole life insurance would cost about $5000 per year. If you really have $5000 a year to put into this project, consider buying term and investing the difference in mutual funds. Even this recession doesn’t change the fact that there are plenty of mutual funds out there that have historically produced 12% or more return, but let’s use 10%.
We would be generous to say that the whole life policy would have generated $80,000 in cash value in 20 years. With mortality cost and policy expenses it would be doing well to produce that. If you invested the difference between the whole life policy and the term policy, $4570 per year at 10% for 20 years produces $288,000. 5 more years and it will have produced enough to replace that life insurance policy with cash. Self insuring. What a concept!!
There is one area where I believe Dave has missed the mark in saying no to all permanent insurance. There really is no substitute for permanent protection for estate tax purposes. I do agree with Dave that it shouldn’t be done with a cash value policy. Far and away the best permanent product is a universal life with an external no lapse guarantee. Permanent term insurance if you will.
Bottom line. Cash value policies benefit two of the three parties involved, the company, the agent and you. It’s not you.
April 20th, 2009
There are several options available for paying your life insurance premium. To see it advertised you would think that the only options are monthly.
Of course the reason for advertising monthly rates is well known. Giving a potential customer sticker shock by making them think they might have to pay $240 for term insurance all in one whack is a no brainer when you can keep them focused by saying $20 a month, or even the famous pennies a day approach.
But let’s talk options because they are in fact very important. Being a graduate of the Dave Ramsey Financial Peace University (remember Dave’s Town Hall next week), I can tell you that budget is everything in your financial life. If it’s not budgeted and comfortably so, there is a point when something else will get in the way and you won’t pay that life insurance bill. Lapsed life insurance isn’t going to help your family if something happens.
Even though annually, once a year, is the least expensive way to pay for your life insurance, getting a large bill once a year at least in my world throws everything off. The other options are semi annually, quarterly and monthly. Generally the only way you can pay monthly is by automatic bank draft. All of the options other than annually incur something of a surcharge or, as the companies like to put it, the annual premium is actually a reduced option.
To put this in perspective let’s assume your life insurance annual premium with Prudential is $1000. Each company has a factor for determining the different payment modes. With Prudential if you want to pay semi annually that factor is .52, or $520 every six months, $1040 a year. If you want to pay quarterly their factor is .265, or $265 every three months, $1060 a year. If you want to pay monthly their factor is .09, or $90 per month, $1080 per year.
For those who are more concerned with interest lost versus ease of budgeting they often pick annually. As for me, the ease of the monthly bank draft and the peace of mind of knowing that I’m not going to accidentally lapse something, is worth the additional charge.
Bottom line. Make sure the total cost of your life insurance is affordable and make sure you budget your payments so that you can maintain the valuable coverage.
April 18th, 2009
It’s been a fascinating couple of years. I will sum it up by saying that we have helped a lot of people get life insurance who never thought they could. And what better way to celebrate the information we’ve shared and the victories we’ve had than with a shared meal, a key word salad.
Diabetes has been at the forefront of our life insurance efforts from the very start. We’ve made huge headway in finding aggressive underwriting for type 1 diabetes and type 2 diabetes. I think our strong point has been in education. There are a lot more people out there today that know what their A1c is than when we started.
I’ve been very clear about where some of the problems lie in our industry. The AARP/New York Life collaboration, on what can only be described as a sick crime against older folks, continue to offer the worst term insurance and whole life insurance in the business. They are simply not the advocate they claim to be.
I’ve stepped on some toes along the way. Selectquote and Zander Life insurance have taken exception to some of my observations. Being a Dave Ramsey fan and I think, ultimately, a reasonable person, I did apologize to Zander. In spite of Selectquote’s berating commentary, I still stand by my assertion that they are biased in what companies they offer (otherwise they wouldn’t be so easy to beat) and I still believe that Suze Orman should go back to waitressing. As to their assertion that I only use Selectquote and Suze Orman for search engine optimization, well, I don’t, even though they think I do. If I didn’t think there was better service elsewhere and more honest advertising, I would never have mentioned Selectquote.
We’ve touched on scuba diving and Prudential being a leader in great rates for recreational divers. Pru also stomps the competition on prostate cancer, sleep apnea and mild anxiety issues. While providing direction on those issues we have also been able to provide direction for those involved in skydiving and foreign travel to places where kidnap and ransom insurance is more than just a casual thought.
We’ve stayed abreast of the economic meltdown and recession that have whacked us all and tried to help people understand how best to handle their life insurance needs in these tight times.
We’ve held lengthy discussions about obesity and the impact it can have on other health issues such as hypertension or high blood pressure, cholesterol, heart disease, heart attack, stroke and cancer. We’ve discussed the risk and benefits of gastric bypass surgery as a means to avoid the life threatening side effects of being over weight.
Probably our biggest response has been from those suffering from depression and bipolar disorder. We reached a group of people that have truly been black balled in the insurance industry and we’ve been able to find some level headed underwriting and hit some major home runs for those who have the name tag but lead normal lives.
We have bared the facts behind the black eye of all black eyes in the insurance industry, the non guaranteed whole life, universal life and variable universal life policies and explained the alternatives in the permanent insurance market. There is nothing that provides greater value and peace of mind than a rock solid guarantee.
We’ve had frank discussions about business life insurance such as key man insurance and buy/sell life insurance. We did a whole series on women and life insurance. We’ve provided direction and information to private pilots that they aren’t getting anywhere else. We’ve talked about the guts of the policy when it comes to the two year suicide and incontestability clause and the accelerated death benefit and the beneficiary rights and the beneficiary issues for those who aren’t in a legal relationship such as a gay couple or an unmarried couple.
Bottom line. And the list goes on and on. We’ve tried to leave no stone unturned and no question unanswered in our quest to find life insurance for those whose mortality risk might be more challenging than average. As an independent agent it has been gratifying to have so many ways to help those who have been mishandled by the wrong agent or the wrong company. As we continue to reach out my prayer is that all who need help find it, and that more agents consider serving those who are harder to help.
March 18th, 2009
When Dave Ramsey talks about taking care of the basics, housing, food, utilities and such, he hits right at the core of what life insurance is all about. Life insurance isn’t about enriching those left behind. It’s about making sure they can live on without losing ground, maintaining dignity.
While there are those of us who would love to somehow leave our families wealthier than we found them if death comes prematurely, life insurance has always been about replacing loss and not creating wealth where there wasn’t any. Financial justification is the industry term. It hasn’t always been around and we get a fair number of calls from people who still remember the good old days when you could have as much insurance as you could afford.
That led to insane decisions by life insurance companies to allow people making, say, $10,000 a year to take out a policy for $1,000,000 or more. This was clearly not for income replacement, but rather for the purpose of changing the financial dynamics of a family. Now please understand that I am not saying that people who are poor should stay that way, but if insurance companies don’t operate in a prudent and yes, profitable manner, they won’t be around to fulfill their mission.
So what is reasonable? As a base a person should figure out what it takes to keep their family from having to move, whether that means paying off a house or making sure they have rent money for as long as they need it. You should have an idea what food and utilities cost and make sure your family is provided those basics for as long as they need it.
Suze Orman would say that you need to have 20 times your annual income. Truth is that she doesn’t have a lot of budget concerns. A more realistic approach is to start with those basic expenses and look at different term insurance options. Find those amounts and term lengths that fit within your budget and then have an earnest talk with your spouse about what is more important. If you think about it, within a given budget you might be able to get $1,000,000 of 10 year term or $500,000 of 20 year term or $250,000 of 30 year term. The most important input on that decision really has to come from the spouse that would be the beneficiary. It could be that having less insurance but knowing that it is guaranteed for a longer period is exactly the right fit. It could be that having 5 times your annual income stays in force where 20 times wouldn’t.
If we’re talking about the wife as the surviving spouse, you’ll probably be able come to a reasonable solution soon. Generally women have a better handle on what it takes to keep the ship up right without blowing a budget hole in it. It’s a little trickier with the shoe on the guy’s foot. Some insurance is appropriate and in a lot of cases the wife should have as much or more insurance than the husband. With no children left at home I chose an amount on my wife that would put a roof over my head…..in Belize.
Bottom line. Don’t get pushed by what one guru or another says is the right thing to do. This is important stuff and remember that when it’s all said and done, something within your budget is way better than nothing and way better than too much that falls victim to your budget down the line.
March 10th, 2009
