You aren't double dead

Dear Dave,

My credit union offers free accidental death and dismemberment insurance. Should I take it?

-Alaina

Dear Alaina,

That's fine if it's free. However, I wouldn't rely on it as an integral part of my overall financial plan.

In most cases, accidental death and dismemberment policies are just a gimmick. You're not double dead if you die by accident, and your spouse or family doesn't need the money if you die by accident rather than a heart attack. They need the same coverage and the same protection regardless. When it comes to life insurance, I recommend a good level term policy that's 10 to 12 times your annual income. That means if you make $50,000 a year, you need $500,000 to $600,000 in coverage.

Still, if it's really free I've got no problem with the policy. Just make sure you're not paying some other big fee to join a club so you can get "free" stuff. When that happens, it's not really free after all!

-Dave

Dave Ramsey is America's trusted voice on money and business. He's authored four New York Times best-selling books: Financial Peace, More Than Enough, The Total Money Makeover and EntreLeadership. His newest book, written with his daughter Rachel Cruze, is titled Smart Money Smart Kids and is out now. The Dave Ramsey Show is heard by more than 6 million listeners each week on more than 500 radio stations. Follow Dave on Twitter at @DaveRamsey and on the web at daveramsey.com.