I received an email today from Ole’ Mr. Ramsey’s preferred insurance group. I’ve always found it interesting that so many people follow his advice, even though he has no licensing or credentials. I am a licensed agent in the life and health world, so my point of view is a little different. Many of the things that Dave tells folks on his radio show or in his books are solid, clean recommendations that I agree with. Here are two that were in this email blast that I totally disagree with, and my reasons for disagreeing.
1- Don’t ever buy Accident or Critical Illness Plans.
First, they give no reasoning for why we wouldn’t need that coverage. If I ever argue against a particular train of thought, I try to be prepared and share my reasoning. Let’s take accident coverage as an example. While they give no reason for not needing accident insurance, one of the great benefits of accident insurance is that having accident insurance allows you to safely have a higher deductible health insurance plan. The savings on monthly premiums on your higher deductible plan can more than cover the premiums of the accident plan and still allow for additional cost savings that can be used to reduce debt, save for retirement, or fund a family vacation. Not to mention the fact that you would have first dollar coverage for any trips to the hospital because of an accident. An additional benefit of accident coverage is there aren’t any network issues, so if your young soccer player twists an ankle out of town you can go to the local hospital rather than having to endure a long and painful trip home before you can get care.
2- Don’t purchase any type of Cash Value plan
I’m sure you already know how big of a fan I am of the retirement benefits of a solid cash value plan. If built right, the cash value accumulation can compete with many other investment options, with the ability to provide substantially higher income at retirement. Did I mention there’s no risk of loss due to the stock market. Of course, since it’s life insurance, if you die you’ll leave a nice, income tax free benefit to your family.
Are these plans perfect for everyone? No. Do they fit for many of us? Yes. Cash value life insurance is a very underutilized tool in our country today.
So I guess we need to take everything we hear on the radio, or get in an email, with a big grain of salt. There are many tools out there for us to use. It’s important that we find advisors wiling to teach us how to use each tool most effectively.
About this Author: Ed Kinsey has been in the financial services industry since 2003. He has experience in Real Estate, Mortgages, Commercial Finance, Annuities, and Life and Health Insurance. His goal is to benefit the lives of one million people. He want companies to start providing better benefits at lower costs through our services. He wants to enlighten people to the retirement benefits available through life insurance, the only tax free retirement option. We have secure solutions. Ed is also a world ranked powerlifter and fitness enthusiast.