dave ramsey term life insurance policies
Do you agree with Dave Ramsey about child life insurance?
First, watch the website here to get Dave’s viewpoint:
https://www.mytotalmoneymakeover.com/?event=displayFreeContent&intContentID=9418
Please listen to the audio before answering. Now, his point that kids don’t need to have coverage to maintain insurability if they get sick seems wrong…if a kid gets a long term disease/illness, they can’t get life insurance right?
So specifically:
1) Shouldn’t you have your kids insured to maintain insurability if they get sick (like cystic fibrosis, aids, cancer, etc.) later in life and then can’t get insured??
2) Does the rider on my policy maintain the insurability or is it different than having a separate policy for the child?
Thanks!
1. It’s not cost effective. Do the math. The percentage of children who become uninsurable in the first 18 years is about 1/10 of 1%. Multiply your premiums by EVERY Child, and you’re much, much, much better off putting your $75 a month (three children on average) into that growth stock mutual fund Dave talks about.
2. Policy eligibilities aren’t transferrable. So coverage under a rider on your policy, doesn’t in any way maintain insurability through a different policy.
If your kids get that sick, what’s the actual POINT of the payout? Generally, for life insurance (for kids, it’s about $5,000 of payout) it’s the funeral costs. Life insurance is NOT going to help with medical bills, and my child with CF, Cancer, Aids, is NOT likely to get married and have their own dependents (children) to worry about.
If you want MORE than $5,000 of coverage, they DO need to be able to prove that they are insurable, when they are older.
So. What’s the GOAL of the life insurance? For kids, it’s usually to pay for a funeral. If you’re worried about their insurability as an adult, how much do you need to carry on them, as an adult? See, there’s no way to set a goal.
People trying to sell you life insurance for children, are playing on your fears and emotions. Not your logic.
