Do You Need Life Insurance? Here’s What Dave Ramsey Thinks


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The financial guru has some great advice about life insurance.


  • Life insurance could protect your loved ones in the event of your passing.
  • Dave Ramsey thinks life insurance is a good idea, but there’s a specific type he’s a fan of.

If you have people in your life who depend on you financially, then life insurance is an important thing to have. That’s something many financial experts agree upon, and Dave Ramsey is one of them.

As someone who urges consumers to avoid debt at all costs and take control of their finances, Ramsey isn’t one to advocate for a needless expense. And so if he’s telling you to buy life insurance, it pays to listen.

That said, there’s a specific type of life insurance Ramsey tends to favor. And it’s a type you may find more than affordable.

Choose term life over whole life

Term life insurance will cover you for a preset period of time. You might get a term life policy that lasts for 15 years, 20 years, or longer. The length of time you’re covered should hinge on your personal situation.

If you’re first applying for life insurance when your children are in their mid-teens and your spouse is pushing 50, then a 10-year policy may suffice for you. The logic there is that in 10 years’ time, your kids might be out of college and working on a full-time basis. Meanwhile, your spouse might be on the cusp of being able to collect Social Security and be at an age where they can access funds from an IRA or 401(k) without penalty.


On the other hand, if you’ve just had a baby, you may want to choose a term life insurance policy lasting 25 years. That way, your child would be covered through young adulthood.

Either way, Dave Ramsey thinks term life insurance is a better deal than whole life insurance. Whole life insurance covers you permanently, so you’ll never age out of your insurance coverage. However, whole life policies can be prohibitively expensive, so you’re better off sticking with term life insurance and securing premiums you can actually keep paying.

How much coverage do you need?

Just as the length of your term life policy should depend on your personal circumstances, the amount of coverage you secure should be based on your family’s specific needs. As a general rule, Ramsey says, “Get coverage that’s equal to 10–12 times your annual income.”

That’s definitely a good starting point, and it’s also a reasonable amount of coverage to have. That said, you may want to pad that amount to cover other expenses, like outstanding debts (such as your mortgage) and funeral costs. You may also want your life insurance policy to include some funds that could potentially be used for your kids’ education.

So, say your current salary is $60,000. You might choose to secure coverage equal to 12 times that sum, or $720,000. You might also add another $150,000 to cover your mortgage balance plus $10,000 for funeral expenses for a total of $880,000. And if you have two kids, you may decide to bump that sum up to $1 million so there’s extra money available for educational expenses.

The great thing about life insurance is that you can customize it to your family situation. And in doing so, you’re buying your loved ones the protection they need and deserve.

Life Insurance Protection for You and Your Family

While many varieties of insurance coverage are designed to help protect a person’s family and assets, life insurance is a vital type of protection. The right life insurance can help protect the people that depend on you the most if you should pass away. Choosing the right life insurance policy is critical to ensure your loved ones are protected properly. We have sorted through the various options to provide you with our choices for the best life insurance policies available today.

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