Why Term Life Insurance Instead of a Cash Value Plan?

Term life insurance is the only type of coverage recommended by Dave Ramsey and his team—never cash value policies like whole life, universal life, or variable life. The reason is straightforward: term life is much more affordable, and you only pay for coverage during the years you actually need it. The idea that you need life insurance for your entire life is a sales pitch, not a financial necessity. If you’re managing your money well—paying off debt and building savings—you won’t need life insurance forever. So why keep paying for it?

Using life insurance as an investment is also a bad deal. The returns are low, and insurance isn’t meant to be a savings vehicle. Its purpose is to provide financial security for your family in case something happens to you while they still rely on your income. That’s it.

When it comes to choosing the right policy, Dave typically suggests a 15- or 20-year term, which gives you enough time to strengthen your finances and reach a point where life insurance is no longer necessary. If you’re younger and just starting a family, a 30-year policy might make sense to provide extra time and flexibility. He also recommends coverage that equals 10–12 times your annual income. This ensures your family can maintain their financial stability while handling expenses like debt, education, emergencies, and final costs.

If you’re ready to protect your family’s future, get a free, personalized quote on our website, or call one of our agents at 1-800-356-4282 for expert assistance.