Why You Need Life Insurance While Paying Off Debt

SUMMARY

Amber in Phoenix, AZ calls Dave to ask about her life insurance policy. She’s in the process of paying off her debt in Baby Step 2 and wants to know if she should get life insurance while paying off debt or if she should wait and get a policy once she’s out of debt.

Dave explains that life insurance is not really a question of which Baby Step you’re in – it’s simply a necessity for most people. The idea is that your loved ones would be covered if something ever happened to you. You want to be protected.

Dave recommends getting 10-12 times your income in term life insurance from Zander, an independent life insurance broker. You will answer some questions about your current health and medical history, and they will shop around and give you the best price for your policy.

RESOURCES


THE DAVE RAMSEY SHOW

Did you miss the latest Ramsey Show episode? Don’t worry—we’ve got you covered! Get all the highlights you missed plus some of the best moments from the show. Watch debt-free screams, Dave Rants, guest interviews, and more!

Check out the show at 4pm EST Monday-Friday or anytime on demand. Dave Ramsey and his co-hosts talking about money, careers, relationships, and how they impact your life. Tune in to The Ramsey Show and experience one of the most popular talk radio shows in the country!

Ramsey Network (Subscribe Now!)

• The Ramsey Show (Highlights):

[sebastianwilliamson]

It's a good idea to consider insuring a non-working spouse as well. The work they do caring for the home and the children brings immense value that many people often underestimate, and overlook.

If the non-working spouse were to pass away, not only would the family incur final expenses, such as funeral and burial costs, but there would likely be childcare related costs added to the surviving family's monthly expenses.

[EastCoastReefer]

It’s a must if you have children. Not so much if you have a healthy and able spouse.

[rosen]

Q: DR suggests insurance to cover her income, but nothing for him because he's not working. If the idea is to maintain quality of life by replacing the lost income, then likewise, they would need insurance on him to cover what he does, even if there is no paycheck involved.

Childcare and cleaning and yard work and basic home maintenance are not free, so if he's doing these sorts of things now, you probably should figure him as a $25k income for insurance purposes.

[mylifeinsuranceforelderlyp]

Do i really need this? People always ask this question.

[honestmomvlog]

So, I’m curious. I’m a stay at home parent. I noticed he didn’t advise her to take life insurance out on her husband.... but as a stay at home parent I know that even though I’m not collecting an income, my husband would have to pay someone to cover care costs.... so would my life insurance be 10X what it would be to cover care for my boys?

[taylorbrione]

You aren't healthy if you smoke.🤦🏿‍♀️

[techtips]

Where can you invest to get a safe long-term 10% return!?

[sbrayer]

Dave, when do you stop with term insurance? 62 yrs no debt

[horserider]

I get $300, 000 term 20 years for $30 per month everyone should have life insurance

[mx]

Advice, if you get insurance through work and are on babystep 2, is it necessary to get another policy??

[rachelroelands]

Got a life insurance ad before this video

[xdozie]

you mean that's Zack from Chicago

[gym]

Most of us lack a comprehensive understanding of life insurance and why, how much, and what type of insurance one should purchase.... respectfully I don’t feel Dave has given this subject the depth of attention it deserves... Correctly so because each individual’s situation is different ( to a degree)
Where and why 10-12 times ones salary in life insurance has become the goal is beyond me...Lol really!
Look, do a bit of self insurance... use your income ( especially as you get older ) to invest in you not these insurers.... level term policies are great... but why provide for anyone for a lifetime; lose the silly emotions and think... are they doing for you in kind? Look at insurance as a stop gap measure.... Not something for lifelong income... Live in the now

[edwardrobichaud]

I’m about to accept a offer on 20 years term ins 500k for $61 a month. I’m 41, high BP & sleep apnea. Think it’s a good deal?

[KRscience]

I don't understand why you're supposed to have enough life insurance for your spouse to essentially live the rest of their life without working. I completely understand why you should have enough to cover any children and debt.

[blakeb]

not having life insurance ESPECIALLY if you have young children or children under the age of 18-22

[sammiller]

Does everyone need disability insurance as well???

[rockfinancial]

Insurance, here, insurance there. Some cases it's good, but I'm real skeptical about life insurance. Make better financial decisions while you're alive so you DON'T create a burden on your loved ones if you die; this way here you don't have another insurance company to pay...

[Omialias]

Was the life insurance a April fools jock? Isn't life insurance not a investment

[chrisbaker]

Quit smoking and put that money you where spending on cigrattes toward debt and you will get healthier and richer.