In a recent advice column, financial guru Dave Ramsey responded to a medical resident’s question about how much term life‑insurance to purchase. The resident, a final‑year medical student named Will, asked whether the coverage amount should reflect his present resident salary or the higher earnings he expects as a practicing physician.
Ramsey’s Recommendation
Ramsey praised Will’s hard work and encouraged him to continue trusting God and pursuing his career. He explained that, in most cases, life‑insurance coverage should be based on the income a person currently relies on, since that is the amount families are accustomed to living on.
However, Ramsey acknowledged that a resident’s future earnings as a doctor will be substantially higher. He suggested using a rule of thumb of 10 to 12 times one’s annual income for term coverage. For Will, Ramsey advised considering a coverage amount roughly double his current earnings as a safety net, noting that the policy would remain affordable if Will stays in good health.
Adjusting Coverage Over Time
Ramsey emphasized that life‑insurance needs can be revisited as income changes. Once Will begins earning a physician’s salary, he can easily increase his coverage to match his new financial reality. The cost of term life‑insurance, Ramsey noted, remains reasonable even with higher coverage limits.
He concluded with a blessing, urging Will to keep working hard, stay financially wise, and trust in God’s provision.
Original reporting: KTSA News/Talk (San Antonio) — read the source article.
