For over 20 years I have worked personally with Dave Ramsey, his listeners and team members to help them make important and informed decisions about their insurance needs and the most cost effective ways to address them. Through the years I have responded to over 10,000 of Dave’s listeners regarding their insurance questions.
This blog contains many of the most frequent questions and answers since they provide an excellent resource to Dave's specific advice on very specific insurance questions. I hope you find this information to be a valuable resource that you can refer to many times in the future as you progress along your financial path. Click on the category noted which relates to your question so that you can see the posting currently available. If you do not see your question or still have concerns please don't hesitate to use the "Question Widget" noted on this site for further information or call us toll free at (800) 356-4282.
Many people are surprised that the advice from Dave and I doesn’t always involve the purchase of insurance as the only alternative. Insurance is a key component of any family's financial plan but it can also be a drain and a detriment if the wrong plans are purchased. Implementing the plans and approaches that Dave and I recommend, most importantly, the establishment of an emergency fund, will help reduce a families overall insurance costs and allow them to focus their dollars on more important things such as getting out of debt and growing wealth.
“Laddering” policies is a common strategy, as many people anticipate needing less life insurance as they get older and are further along in their debt-free journey. This is where the Insured staggers policies at varying term lengths to cover specific needs, and is especially helpful if you have major financial obligations that end at different times. The face amount for each policy would reflect the amount of money needed to pay off a specific obligation. For instance, an Insured may have one 15-year policy to cover their mortgage, and a 20 or 30-year policy related to other needs such as income replacement until retirement and education expenses for their children.
An additional benefit to laddering policies is the potential cost savings over buying one long-term policy with a high amount of coverage, as shorter term periods result in lower premiums.
Many families with special needs dependents consider using term life insurance in conjunction with a special needs trust. The special needs trust would be, in many cases, established by your will, funded initially by a term life policy. There is sometimes an argument of whether to buy a term life policy or cash value life insurance, and Dave still feels that term life is the only way to go. The basic premise for cash value plans is that you will need life insurance your whole life, so the plans overcharge you in the early years to pay the higher costs in the later years. Dave’s opinion is that, if you buy term life insurance, you avoid this overpayment period and use the savings to attack debt and to build savings. With 15 or 20-year level term insurance you have time to eliminate your debt and grow your savings so you no longer need life insurance.
Determining the amount of coverage would be similar to the regular process he discusses, in that you need to measure the amount of funds that would be needed to support your dependent per year and then multiply that amount (typically by 10) to represent the amount of coverage to purchase. For example, if they needed $30k a year to maintain their assistance and address future needs, then an amount of $300k in life insurance (which invested at 10%) would generate those needed funds. Some people utilize a lower interest rate return, which would increase the multiple of used. Since Term life is so much cheaper than a cash value plan you would be investing/savings the difference for the 20 or 30 year period of the life insurance so, at the policy expiry, the savings is now used to address their ongoing needs.
If the amount of coverage you have right now is appropriate but you know you will need it past the expiration of your current plan, then Dave’s recommendation is to get a new policy now to lock in rates into the future and assure that you don’t lose eligibility (or have to pay a higher price) by waiting, due to a health condition or other issue arising. In some cases, you can keep the existing plan and only buy a smaller amount of coverage for the future if certain risk concerns are alleviated before the expiration of the existing term policy. If your mortgage is paid off, education expenses are no longer an issue, and you’ve increased your savings – these all help reduce one’s need for term life insurance. In that case, keeping an older, less expensive policy until its expiration can reduce your overall costs. But still buy a new plan now for any needs past the old policy’s expiration.
However, if your need for protection is more than the amount you currently have, or extends past the level guaranteed expiration period, then buying an entirely new policy now for the total amount you need, is the most advisable path to avoid high costs in the future.
A spousal rider isn’t the best choice for life insurance coverage. In most cases, this type of rider ends if the primary insured’s policy expires, lapses, or pays out a death benefit—leaving the spouse without protection when it’s needed most. That’s why the Ramsey team doesn’t recommend them. Spousal riders usually don’t offer cost savings, and many still require the spouse to go through a medical exam and underwriting. Instead of relying on a rider that could disappear at a critical moment, it’s better for each spouse to have their own individual policy to ensure they have full, independent coverage.
Should I Keep My Cash Value Plan if I Wouldn’t Save Money by Switching to a Term Policy?
Dave Ramsey and his team strongly recommend term life insurance over cash value policies because term provides the coverage you need at a significantly lower cost—freeing up money to pay off debt and build wealth.
However, if switching to term doesn’t result in meaningful savings, it may be due to factors like your age, health, or rate class. In that case, the key question is whether you still need the life insurance. If you do—and you’re unable to qualify for affordable term coverage—then keeping your current cash value policy may be the best option for now.
That said, it’s important to remember that as you reduce debt and increase your savings, your need for life insurance naturally goes down. Even if you keep your cash value policy today, you may be able to decrease the coverage amount over time, reducing your premium and freeing up dollars for other financial goals. Eventually, the goal is to become self-insured and no longer need life insurance at all.
Absolutely! Buying term life insurance while you’re still in debt is one of the smartest financial moves you can make. Dave Ramsey and his team do not include it in the Baby Steps because it’s not something you wait to do—it’s an immediate necessity. When you’re in debt, your family is most vulnerable to financial hardship if something were to happen to you. That’s exactly why this is the most important time to have coverage in place.
The good news is that term life insurance is typically very affordable, so there’s no reason to put it off. Dave strongly believes that if your absence would create a financial struggle for your family, you need term life insurance—no matter where you are in your financial journey. Over time, as you pay down debt and build savings, the need for coverage naturally decreases. That’s why a 15- or 20-year term is usually enough to bridge the gap until you reach financial security.
At Zander, we understand the Baby Steps and are here to help you find coverage that fits your budget. Call us at 1-800-356-4282 to explore your options, or compare quotes online today. The right term life policy can be a game-changer, especially while you’re working toward financial freedom!
Finding out you’re uninsurable can be overwhelming, especially if your family relies on your income. But don’t assume one decline means you’re out of options. Different insurance companies have different guidelines, and working with an independent agent like Zander gives you access to multiple carriers, including those that specialize in higher-risk cases.
If term life insurance isn’t an option right now, check with your employer about additional coverage through a group plan, which often doesn’t require medical underwriting. Associations you’re part of may also offer life insurance benefits without health qualifications. While these options may cost more, having some coverage is better than none.
Guaranteed issue plans, like those from Colonial Penn or AARP, provide coverage without medical exams. Though they aren’t typically recommended by the Ramsey team due to higher costs and lower payouts, they can still offer essential protection in tough situations. Accidental death policies are another option, though their benefits are limited since most deaths are from natural causes.
A stay-at-home parent plays a crucial role in keeping a household running, and while they may not earn a paycheck, the services they provide—childcare, cleaning, cooking, and transportation—have significant financial value. If something were to happen to them, the cost of replacing those responsibilities could put a serious strain on the family’s budget. That’s why Dave Ramsey and his team recommend life insurance for stay-at-home parents.
When determining how much coverage is needed, a general guideline is between $250,000 and $400,000 in a 15- to 20-year term policy. The right amount and duration depend on the ages of the children. If they’re young, opting for a longer term and higher coverage amount makes sense to ensure financial security through their most dependent years. If they’re older and more independent, a shorter term with a lower coverage amount can be a more affordable option.
When choosing a term life insurance provider, the main factors to consider are price and reputation. The guidance of Dave and his team is simple: find the best rate from a reputable company. At Zander, we only work with insurers that have an “A” rating or better from AM Best or Standard & Poor’s, ensuring they are financially strong and reliable. This means price is the primary consideration when selecting a policy.
For over 25 years, we have been the trusted partner of Ramsey Solutions for term life insurance, carefully selecting companies that offer their listeners the best rates while maintaining a strong industry reputation. If you’re unfamiliar with a company, that shouldn’t be a reason to overlook them. Dave and I all have policies with providers like Banner Life, Pacific Life, Protective, Prudential, and SBLI—some of which you may not recognize, yet each is a well-established industry leader with expertise in specific areas of the market. Many of these companies have been in business for over a century and are backed by the financial strength and stability needed to protect your family’s future.
If you’re ready to explore your options, give us a call at 1-800-356-4282 or visit us online for a free, instant quote.
Burial policies, also known as final expense insurance, aren’t the best option for covering end-of-life costs. Term life insurance isn’t designed for this purpose because it only lasts for a set period—meaning it could expire before you pass away, leaving no payout for final expenses. The goal of term life insurance is to provide financial protection while you’re paying off debt and building savings, so by the time the policy ends, you no longer need life insurance.
Dave Ramsey and his team advise against buying life insurance solely for covering funeral costs. Instead, those expenses should ideally come from your emergency fund or savings. In rare cases, if an older individual has no savings and no other financial options, a burial policy from a company like Senior Legacy Insurance might be worth considering. However, these policies typically include cash value components, which the Ramsey team generally does not recommend. If you’re looking for the best way to protect your loved ones financially, focusing on paying down debt and growing savings is the smarter long-term approach.
