Jeffrey Wade
Dave Ramsey, through his company Ramsey Solutions, has been committed to helping people regain control of their money, build wealth, and enhance their lives. He recommends insurance coverages that protect against risks that one cannot handle financially. He has recommended Zander Insurance for over 20 years, a company that offers insurance programs in line with his recommendations. Some of the types of insurance that Dave suggests include term life insurance, health insurance, long-term disability insurance, auto insurance, and homeowners insurance. He also emphasizes the importance of identity theft protection, which can help individuals navigate financial security in the digital age.
| Characteristics | Values |
|---|---|
| Health Insurance | Purchase through an employer-sponsored plan to keep costs low |
| Choose a plan with a Health Savings Account to save money with tax benefits | |
| If you have a fully funded emergency fund, opt for a plan with a higher deductible and lower premiums | |
| Participate in a health share plan like Christian Healthcare Ministries (CHM) | |
| Home Insurance | Opt for a higher deductible to keep premiums low |
| Choose a guaranteed or extended replacement cost policy to help rebuild after a significant loss | |
| Auto Insurance | Choose the highest level of deductible possible based on your emergency fund |
| Select at least $500,000 in property damage, liability, and bodily injury liability | |
| Term Life Insurance | Provides financial protection to families for a specific timeframe, often 10-30 years |
| Families receive a payout if the insured dies while the policy is in place, helping eliminate debts and maintain their lifestyle | |
| Long-term Disability Insurance | Opt for 60-70% of your monthly income in coverage |
| Choose the longest elimination period possible (90-180 days) and a benefit period of at least 5 years (up to age 65 if affordable) | |
| ID Theft Protection | Opt for comprehensive restoration services, not just credit report monitoring |
| Look for plans offering white-glove service, at least $1 million in stolen funds and reimbursement protection, and free protection for children |
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What You'll Learn
Health insurance
The Ramsey team and Dave Ramsey himself recommend high-deductible health plans (HDHPs) whenever possible. This way, you can enjoy the benefits of lower monthly premiums, and you'll qualify to open a Health Savings Account (HSA) to cover health expenses and even invest. If you're self-employed or your employer does not provide health insurance, RamseyTrusted partner Health Trust Financial can help you find the right health insurance. Health Trust Financial is a network of licensed insurance agents who live and work all over the country. They are independent insurance agents, meaning they can compare health insurance quotes from multiple local and national insurers to find you the best coverage.
If you are worried about the cost of health insurance, there are several things you can do to make it more affordable. You can use an employer-sponsored plan, raise your deductible, or take advantage of discounts your insurance company offers. Participating in a health share plan, such as the one offered by RamseyTrusted partner Christian Healthcare Ministries (CHM), can also help lower costs. These plans are not technically health insurance, but they allow you to share health care costs like medical tests, maternity, hospitalization, and surgery with a community of believers.
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Long-term disability insurance
Radio host and personal finance expert Dave Ramsey recommends long-term disability insurance as an essential form of financial protection. He suggests getting coverage for 60 to 70% of your monthly income. This is to ensure that you have enough to cover your expenses and maintain your lifestyle if you are unable to work due to illness or injury.
Ramsey advises selecting the longest elimination period that your budget can accommodate, typically ranging from 90 days to 180 days or more if your savings permit. This is the period before receiving your first payout after being declared disabled. Additionally, he recommends opting for a benefit period of at least five years, or up to age 65 if possible.
He also suggests exploring long-term disability insurance offered by your employer as a cost-effective option. However, he emphasizes that it is crucial to have your own policy as well, as employer-provided coverage may only offer limited, short-term benefits that won't suffice if you are out of work for an extended period.
Dave Ramsey recommends Zander Insurance as a trusted provider of long-term disability insurance. He advises against unnecessary add-ons or riders that drive up costs without significantly increasing protection. Instead, he encourages individuals to focus on obtaining the right amount of coverage for their specific needs.
According to Ramsey, long-term disability insurance is a critical component of financial planning, especially considering the likelihood of an individual experiencing a disabling event at some point during their working life.
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Home insurance
Dave Ramsey emphasizes the importance of being prepared for the unexpected. He suggests that individuals should safeguard themselves and their loved ones from potential financial hardships through various insurance policies. According to Ramsey, everyone should have health, auto, home, and life insurance.
When it comes to home insurance, Dave Ramsey recommends selecting a higher deductible to help keep premiums low. He also suggests bundling home and auto insurance to save money and get the best coverage. Additionally, he emphasizes the importance of having sufficient coverage to protect against liabilities and ensure financial protection. Ramsey often endorses Zander Insurance for home insurance, highlighting their customer service and competitive rates. He also recommends homeowners insurance that covers the full replacement cost of the home and its contents, providing adequate liability protection.
Furthermore, Ramsey suggests considering an umbrella policy for anyone with a net worth of $500,000 or more. An umbrella policy can increase liability coverage from the standard $500,000 to $1.5 million, providing an extra layer of protection for individuals with significant assets.
Dave Ramsey also offers valuable insights on maintaining affordable homeowners insurance rates while ensuring proper protection. He provides resources and referrals to help individuals find trustworthy insurance brokers and make informed decisions about their coverage needs.
Overall, Dave Ramsey's recommendations on home insurance focus on achieving comprehensive protection, keeping costs manageable, and ensuring peace of mind for individuals and their families.
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ID theft protection
While ID theft protection is not an insurance product, Dave Ramsey suggests that it is important to have it in place. Identity theft is becoming more common each year, and even though you are not responsible for money that is fraudulently spent or taken out in your name, you will still have to clean up the damage, which can be a big mess. This includes fixing your credit report, dealing with banks, and jumping through legal hoops.
Ramsey recommends that everyone has ID theft protection, especially one that provides comprehensive restoration services. This means that professionals will cover your losses should something happen. Look for a plan that offers white-glove service, at least $1 million in stolen funds and reimbursement protection, and free protection for your children.
RamseyTrusted provider Zander is recommended for identity theft protection. They offer a range of services, including identity recovery, reimbursement, monitoring, and alert services. They also provide access to credit files from national credit reporting agencies and help to verify your identity.
To prevent identity theft, Ramsey suggests freezing your credit, which is free to do and will not hurt your credit score. Staying up-to-date with antivirus software is also important, as is routinely checking for updates and installing anti-keylogger software. Two-factor authentication is another way to protect yourself, as it requires an extra level of security to sign in to your account from another device.
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Auto insurance
Dave Ramsey, the finance expert, has offered advice on the best kinds of auto insurance to purchase. According to Ramsey, there are three essential types of auto insurance that everyone should have, which he calls the "Big Three": liability, comprehensive, and collision coverage.
Liability coverage is considered the most important as it is required by most states and pays out compensation to injured victims of a crash if the covered driver is at fault. While states have minimum requirements for liability coverage, Ramsey suggests buying more than the minimum amount.
Comprehensive coverage and collision coverage are often purchased together as they provide similar protections, but they are distinct. Comprehensive coverage protects against vehicle damage occurring during incidents other than collisions, while collision coverage is for accidents. Ramsey recommends having both types of coverage, though he notes that if you drive an older vehicle and could pay cash to replace it, you could consider forgoing one of these coverages.
In addition to the "Big Three," Ramsey suggests buying uninsured and underinsured motorist coverage, which pays for losses if a crash is caused by a driver without enough insurance. He also recommends medical payments coverage (MedPay), which covers out-of-pocket medical expenses for you, your passengers, or family members in the event of a car accident, regardless of who is at fault. Personal injury protection and rental reimbursement are also on his list of coverages to consider.
Dave Ramsey emphasizes the importance of having the right auto insurance coverage to protect your financial future. He suggests working with Endorsed Local Providers (ELPs) or RamseyTrusted pros, who are licensed insurance agents that can help you understand your car insurance needs and find the best coverage at the right price. These agents can compare quotes from multiple insurers and ensure you have the coverage you need without unnecessary extras. By bundling home and auto insurance, Ramsey suggests that you can save money and get better protection for your valuable assets.
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Frequently asked questions
Dave Ramsey suggests purchasing health insurance through your employer when possible to keep costs low. He also recommends opting for a plan with a Health Savings Account to put money away with tax benefits to cover medical costs.
Dave Ramsey recommends term life insurance to provide financial protection to families for a specific timeframe, often ranging from 10 to 30 years.
Yes, Dave Ramsey suggests investing in auto insurance to protect your modes of transportation. He recommends choosing the highest level of deductible possible based on your emergency fund and selecting at least $500,000 in property damage, liability, and bodily injury liability.
Dave Ramsey emphasizes the importance of homeowners insurance, especially if your mortgage company requires it. He recommends selecting a higher deductible to keep premiums low and considering a policy offering guaranteed or extended replacement cost coverage.
In addition to the above, Dave Ramsey recommends long-term disability insurance, covering 60 to 70 percent of your monthly income. He also suggests identity theft protection, which can help navigate financial security in the digital age.
