Dave Ramsey's HEATED Debate with Infinite Banker - My Response

I'm reacting to a viral clip from the Dave Ramsey show where he gets into a heated debate with a caller, who is an infinite banking advocate. Dave Ramsey is of course against whole life insurance and believes the product is a scam.

I'll be breaking down this intense exchange about infinite banking, pointing out what both Dave Ramsey and the caller get wrong, and what they get right. You'll be shaking your head at the outrageous debate these two have about whole life insurance.

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[KP-hiom]

My dad died at 83. He had a $100k insurance policy. He paid it up and never borrowed against it. Had he invested that money way back when, the value would have been 4x - 5x easily.

[foryou]

Dave is assuming that this magic mutual fund will always grow, will always be there or the guy's son will never be sued, will never be litigated against, his son will never be divorced. A policy will be with him for his entire life and his son's son will be protected as well. 2% of all Term policies ever pay out.

[zackphillips]

Who needs life insurance when you’re 80? Lmao

[davidholscher]

Look I’m gonna be honest with you!!! Would you listen to someone that has 2 mill in life insurance or a YouTuber that probable doesn’t got more than a hundred mill and then you got dav Ramsey with a 700 million net worth of finances….. just sayin listen to the guy that’s almost got a billion dollars

[MedicalMoneyMultiplier]

The "cash value" dies with you argument is such a non-starter.

The cash value is the "equity" you've built up in the policy via premiums and is the net present value of the death benefit.

You buy insurance for the death benefit, not the cash value. The cash value is a feature unique to whole life that allows you to use the death benefit while you're alive.

Not sure why this is so difficult for folks to get

Keep making great videos

[rcruz]

This guy was the worst guy to discuss and debate infinite banking with Dave Ramsey

[sbman]

Whole life is confusing, and i don't trust anyone who tries to sell you something by saying you can go on vacation. If you have to think so hard to justify it, it's probably not good.

[VirtousStoic]

I mean dave ramsey is more a spending therapist than a financial guru. Regardless of his networth. So tbh i dont care what he says

[Futbalunlimited]

Hey Caleb - slightly off topic but could you do an episode overviewing how a self-directed 401(k) compares (or does not compare) to a front loaded whole life policy if the primary need is to offset tax exposure. Have you done a video covering the opportunity cost and long term control vs tax exposure. Is there even a comparison to be had or is this an off topic un-related concept.

[andyzeglevski]

I appreciate the breakdown. I believe you are completely accurate though this gentleman was coming at it with the wrong angle. To make matters worse, although Dave is quite arrogant, sometimes he is unfortunately educated enough to make anyone who's not on top of their game look a little foolish.

[joelrobertsonmusic]

This got real interesting. It’s exchanges like this that make it hard for me to follow Dave.

[justinfletcher]

Dave's point with pay cash for a house is risk mitigation

[Ramsdl]

The only people I've ever seen defend WLI are people who sell it or work in the industry. Up to and including this BetterWealth channel. Just because people in the industry don't call WLI an investment doesn't mean it isn't. That is just another selling tactic to get people to pay for this stuff. Anytime you put money, time, or effort toward something with an expectation to have a future return that is an investment. I can "invest" my time and effort into learning a language with the payout of being able to speak another language. If you put money into a WLI policy you are investing. period. don't be confused by the industry speak. don't INVEST in whole life insurance.

[surpotel]

This BetterWealth looks to be a cut and paste job. No way will Dave Ramsey get into a debate with this Infinite Banker

[mikep]

Benefit is derived by borrowing against a WL policy and earning the spread in the economy. Buy Term and invest means by-passing the need to borrow and just invest directly. Over the long term, earnings will be many 10X times better. At some point, you become self-insured by the account value.

[emmanuelbadajos]

My opinion, the Whole life insurance route offers stability and projected growth. While the mutual fund/trading stocks route is risky but could be alot more exponential if people learn how to get on the right train at the right time - discipline.

[DavidRakeck]

Likely market returns over the next 20 years is probably going to be 6.5-7% according to vanguard, we are going to go through a reversion to the mean. To bring market average back down to 8-9%

[nelsonmayer]

Caleb where are you going to get 11 %for 80 years

[anthonypinto]

Less than 1% of bank assets put money in life insurance. You can check BOLA

[sPGgwUxYrSdCfH]

So in this situation, if you had a 2.5million policy and you took a $70K loan @5% and never paid it back, would you just be out $73, 500 from your death benefit if you passed away? In other words, would your beneficiaries only receive $2.4 million upon your death? Or does the interest continue to accrue every year you don't pay it back???