Paul Sanchez
Dave Ramsey is a well-known source of financial advice, with a particular focus on insurance. He recommends that people take out insurance to cover risks that they cannot afford to take themselves. He has recommended Zander Insurance for over 20 years, and also suggests that people take out long-term disability insurance, auto insurance, and homeowners insurance. When it comes to medical insurance, Ramsey recommends private insurance whenever possible, and high-deductible health plans (HDHPs) in particular. He also suggests that people purchase health insurance through their employer when possible to keep costs low.
| Characteristics | Values |
|---|---|
| Health Insurance | Purchase through your employer, if possible, to keep costs low. |
| Opt for a high-deductible health plan (HDHP) whenever possible. | |
| Choose a plan with a Health Savings Account to help put money away with tax benefits to cover medical costs. | |
| If you qualify for Medicare due to your age, health, or income, it may be your most affordable option. | |
| If you are self-employed, you can choose between private and government health care options. | |
| Health Trust Financial is recommended to find the best health insurance. | |
| Long-term disability insurance | Opt for 60 to 70 percent of your monthly income in coverage. |
| Choose the longest elimination period possible (90 days is average, but opt for 180 days if you have ample savings). | |
| Select a benefit period of at least 5 years (to-age-65 if affordable). | |
| If long-term disability insurance is available through your employer, tap into that source for affordability. | |
| 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. | |
| Homeowners insurance | Select a higher deductible to help keep premiums low. |
| Opt for a policy offering guaranteed or extended replacement cost coverage to help rebuild after a significant loss. | |
| Long-term care insurance | Work with a long-term care insurance specialist or endorsed LTC expert to compare top policies and costs. |
| ID theft protection | Opt for comprehensive restoration services, including white-glove service, at least $1 million in stolen funds and reimbursement protection, and free protection for your children. |
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What You'll Learn
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 that you opt for coverage equivalent to 60-70% of your monthly income. This is because long-term disability insurance covers some of your income if something happens to you (like an illness or injury) and you can’t work.
Ramsey recommends getting coverage for at least 5 years or more to cover long-term loss of income that your 3-6-month emergency fund won’t cover. He also suggests that you choose the longest elimination period your emergency fund and budget can handle. The elimination period is how long you have to wait before receiving your first check after the doctor confirms you’re disabled. The average time it takes to process a long-term claim is around 90 days, but Ramsey suggests opting for 180 days if you have ample savings.
He recommends getting long-term disability coverage through your employer if they offer it, as it is usually more cost-effective than purchasing a separate policy. However, he notes that an employer-provided policy may have only limited, short-term coverage that won’t cover you if you’re out of work for years. In that case, you may need your own disability insurance policy in addition to what your employer provides.
Ramsey recommends Zander Insurance, a company he has trusted for over 20 years. They offer insurance programs directly in line with his recommendations.
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Health insurance options
If you are self-employed, you can choose from private or government health care options. Private insurance is often better as it gives you more freedom to choose the best coverage for your specific needs. The Affordable Care Act (ACA), or "Obamacare", sets guidelines for how private health insurance companies must cover people, and you can use the government's marketplace website to shop for plans that meet ACA guidelines. Dave Ramsey recommends high-deductible health plans (HDHPs) where possible.
If you qualify for Medicare due to your age, health, or income, this may be your most affordable option, but remember that it has lots of limits. A good independent insurance agent can help you navigate the options and find the best value. There are also several government health insurance plans, such as Medicare, COBRA, and state-run programs like Medicaid and the Children's Health Insurance Program (CHIP). These are designed for people who may not be able to afford private insurance.
Dave Ramsey also recommends Health Trust Financial, a network of licensed insurance agents, to help you find the right health insurance. They are independent and not tied to a single insurance company, so they can shop around to find you the best deal.
Long-term care insurance is also an important consideration, and Dave Ramsey recommends working with LTC experts to compare top policies and costs.
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Identity theft protection
Dave Ramsey recommends that everyone have identity theft protection, especially a plan that provides comprehensive restoration services. Identity theft is becoming more common each year (the Federal Trade Commission received 1.1 million reports of ID theft in 2022), and you will have a lot of work to do if it happens to you. Although you are not responsible for money that is fraudulently spent or withdrawn in your name, you will have to fix your credit report, deal with banks, and jump through legal hoops. However, if you have a good ID theft protection policy, your provider will assign a counsellor to your case to clean up the mess for you.
Therefore, make sure you get a policy that offers restoration services, not just credit report monitoring, which you should be doing yourself anyway. Dave recommends looking for a plan that offers white-glove service, at least $1 million in stolen funds and reimbursement protection, and free protection for your children.
When you work with a RamseyTrusted pro, you can feel confident that they will find the best policy for you at the best price.
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Homeowners insurance
Dave Ramsey, a popular personal finance expert, offers insights on various insurance topics, including homeowners insurance. While he doesn't specifically recommend a particular company for homeowners insurance, he provides valuable advice on this type of coverage.
Firstly, Ramsey emphasizes the importance of having sufficient homeowners insurance to protect your financial security. He recommends ensuring that your policy includes extended dwelling coverage, which provides an extra layer of protection above your policy limits. This type of coverage ensures that your insurance company will rebuild or replace your property, even if the cost exceeds your policy's coverage limit. It is particularly relevant for higher-value homes.
Additionally, Ramsey suggests working with an agent to bundle your home and auto insurance. This approach can help you save money while ensuring you have the best coverage for your most valuable assets. He also recommends considering an umbrella policy, especially if you have a net worth of $500,000 or more. An umbrella policy adds extra liability protection, shielding your savings, home, and future wages in the event of an accident or incident that exceeds your standard coverage limits.
When choosing a homeowners insurance company, Ramsey advises against Aflac, favouring traditional insurance companies that offer comprehensive coverage. He recommends Zander Insurance, a company he has endorsed for over 20 years, citing their commitment to offering diverse coverage options, exceptional customer service, and personalized guidance.
While not specifically about homeowners insurance, Ramsey also offers advice on health insurance, which can be an essential component of your overall financial plan. He suggests purchasing health insurance through your employer when possible to keep costs low and choosing a plan with a Health Savings Account (HSA) to take advantage of tax benefits for medical expenses.
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Term life insurance
Dave Ramsey recommends purchasing term life insurance to provide financial protection for families for a specific period, often ranging from 10 to 30 years. The basic principle of term life insurance is that if the insured person dies during the policy period, their family will receive a payout to help them eliminate debts and maintain their standard of living. This type of insurance is intended to cover risks that individuals cannot handle financially, and in some cases, the cost of insurance is low enough to make it affordable for most people.
When it comes to health insurance, Dave Ramsey suggests buying it through an employer whenever feasible to keep costs down. He recommends comparing various options to find the most suitable coverage for one's needs. He also suggests selecting a plan with a Health Savings Account, allowing individuals to save money with tax benefits to cover medical expenses.
Dave Ramsey emphasizes the importance of long-term disability insurance, recommending coverage of 60 to 70 percent of one's monthly income. He suggests choosing the longest elimination period feasible, such as 180 days if one has sufficient savings, and a benefit period of at least five years, or until the age of 65 if possible. Additionally, he advises taking advantage of long-term disability insurance offered by employers, as it is often more cost-effective than purchasing a separate policy.
In terms of auto insurance, Dave Ramsey recommends selecting the highest deductible that aligns with one's emergency fund. He emphasizes the importance of having at least $500,000 in property damage, liability, and bodily injury liability coverage. This type of insurance is crucial for protecting one's mode of transportation and is required by most states.
Dave Ramsey also discusses the significance of homeowners insurance, especially if required by one's mortgage company. He suggests opting for a higher deductible to maintain lower premiums. He further recommends considering a policy offering guaranteed or extended replacement cost coverage to aid in rebuilding after a significant loss.
Lastly, Dave Ramsey stresses the importance of ID theft protection in today's digital age. He recommends opting for a plan that offers comprehensive restoration services, $1 million in stolen funds and reimbursement protection, and free protection for children.
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Frequently asked questions
Dave Ramsey recommends purchasing health insurance through your employer when possible to keep costs low. He also suggests choosing a plan with a Health Savings Account to help put money away with tax benefits to cover medical costs. He recommends Zander Insurance and Health Trust Financial, an independent insurance broker, to help find the best insurance for your needs.
Health Trust Financial is an independent insurance broker that Dave Ramsey has endorsed for over 20 years. They help individuals and families find the right insurance by shopping different providers and educating their customers.
The Affordable Care Act (ACA), nicknamed Obamacare, is a law that sets guidelines for how private health insurance companies must cover people. The federal government created a website called the health insurance marketplace where individuals can shop for health insurance plans that meet ACA guidelines.
Long-term disability insurance provides financial protection in the event of a disabling event, which can cause significant financial loss for families. Dave Ramsey recommends long-term disability insurance, advising 60 to 70 percent of your monthly income in coverage.
Dave Ramsey recommends auto insurance, homeowners insurance, and identity theft protection. He also emphasizes the importance of long-term care insurance planning.
