Gerber Life Insurance?

[sz9144]

does anyone pay for gerber life insurance for their kids? is this something I should consider? I have two 5 yr olds. what level of benefit do other people have? they state that benefits double at age 21, so 5,000 becomes 10k, 10k becomes 20k, etc. I have no idea which level to purchase. I was considering either 15k (which becomes 30k) or 20k (which becomes 40k).

Thanks in advance!

 

[Colinsmom]

It's expensive for what you get. Is there a reason that you want/need life insurance on your kids? Do you not have savings for a funeral should one be necessary? The benefits on this product are too low to provide any kind of future insurability worth speaking of. If you want to purchase a policy so that they have insurance regardless of their health as adults, then other companies offer much more suitable policies for that purpose.

 

[ceecee]

I've heard that they are a really bad way to save $, if that's what you're trying to do. Probably another whole life insurance would be better, although most advisors advice against that as well.

 

[Sammybeau's Mom]

I remember from Dave Ramsey (Financial Peace) that he said that it was Not a good investment and whole life was also not a good investment. If you need insurance, with term, you get much more for your money.....

 

[tonilea]

I think life insurance for children is a fantastic deal.... for life insurance companies.

Life insurance, IMO, is for people whose income or duties (SAHM) would have to be replaced.

 

[thelittlemermaid]

Had this for my son and got rid of it about 2 years ago. After his sister was born with Down Syndrome, I tried getting her a policy also. I didn't lie about her, what was the use and of course they denied her. In their letter they suggested I wait til she was 5 years old and apply again. I waited till she was 6 years old and they denied her again. That's when I decided since they denied her for the second time, that I was going to cancel my son's policy.

When it came time to get the money back, boy was I in shock of how little I got back after how much I had paid in. I know I should have known better.

 

[KT27]

My Mom paid into it since I was little, I am now 29. I took it over when I was 21. I pay the $9.00 fee per month. Cashing ity out wouldn't be worth it. My DH & I have a larger life insurance policy with another company so I just hold onto this one. My Mom struggled so hard to pay for it. There are better options out there.

 

[kashkdz]

does anyone pay for gerber life insurance for their kids? is this something I should consider? I have two 5 yr olds. what level of benefit do other people have? they state that benefits double at age 21, so 5,000 becomes 10k, 10k becomes 20k, etc. I have no idea which level to purchase. I was considering either 15k (which becomes 30k) or 20k (which becomes 40k).

Thanks in advance!

As a professional in the insurance industry, these types of policies on your children are simply not worth it. The purpose of life insurance is twofold: 1. To replace the income of the policyholder, so that the survivor can maintain their current standard of living without facing a fanancial hardship (child college expenses, etc). 2. To allow for the survivor to pay for final expenses should the policyholder die. Pretty much that's it. In this case, a child's whole life policy is a waste of money.

When it comes to whole life insurance in general, part of your premium is an investmentment and part pays for the insurance itself. In regards to the investment component, the rate of reurn is usually pretty low, and you'd get a better return if you put the money into a mutual fund. In terms of insurance policies, whole life is usually more money for the same amount of coverage, and you're better off with a fixed term policy that covers you from, say 15-years, 20-years, with a fixed premium. A very general rule of thumb is to get a policy that coverages you for 10x the policyholders income.

 

[4Seasons]

Life insurance really should only be purchased for those who provide care and support for the family, i.e. the parents. Whole life is not a good investment at all IMO.
Term life insurance is really the way to go, and you can get a policy very inexpensively that has a rider on it for the kids. We each have a $250k policy on us, with a $30k rider for the kids, it's a term 20-year level premium policy (the monthly cost is the same for the 20 years, no increasing as we hit the next age level), and we pay just under $45/month total for both. I have no idea what the cost would be now but we've had this policy for about 9 years. This coverage is in addition to what my husband's company provides for him at minimal cost in his benefits package (like $3/month for 1 1/2 years of salary coverage).
You can get term level premium policies for different lengths of time. We purchased these when my son was about 2 or 3 and dd was about 6, so there will be coverage until both my kids are grown and in their 20's. That way if anything happens to either of us there will be funds to help provide for their care until they are adults, and any post high school education costs.
Beyond that I really don't see a need to carry life insurance, unless one spouse was financially dependent on the other for support and would need that income replaced in case something happened.

 

[lisarojer]

insurance is nice option securing future as it provide financial help in case of emergency but some times people are not able to understand terms and conditions so it cause problem..if proper study and search for options carried out then this is best

 

[bettymae1121]

I'm going to disagree with the common wisdom that children don't need life insurance.

My DH's coworker's infant son died earlier this year and understandably, both he and his wife were a mess. His wife was damn near suicidal and he had to take a lot of unpaid time off to make sure she wasn't alone (he works 3rd shift so she would be all alone overnight 5 days a week). The financial strain at an already stressful time makes matters even worse. I don't know if they had insurance for their child or not, but I know having it would have given them one less thing to worry about.

If heaven forbid, your child actually dies, odds are you aren't going to want to go back to work right away. But if you won't have paid leave you may not have a choice in the matter. Having life insurance on your child could go a long way in letting you have the time you need.

Another good reason is medical bills and funeral costs. Even if one has medical insurance - there could be deductables and other expenses not covered by insurance. And funeral costs can really add up as well. If you don't have much in savings and you have high deducables and/or poor medical coverage, again having some insurance on your child can help with those costs.

Now there are problably cheaper/better ways to go other than Gerber, you should absolutely research that. But I don't think the conventional wisdom that children don't need life insurance is always so wise. Having insurance money to cover lost income due to time off and cover medical and funeral expenses sounds pretty smart to me.

 

[PrincessBelle09]

You do not need life insurance for your kid. Life insurance is for grown-ups who have a family relying on them financially.

That said, the Gerber life insurance policies are also really, really bad investments. Put that cash into an Education Savings Account. You can contribute up to $2,000 annually, tax free. It's very similar to a Roth IRA. Or, for more flexibility, choose a 529 College Savings Plan.

To the PP, that sort of situation is what a well-stocked emergency fund is for. The Gerber Life Insurance Plans are serious rip-offs and it's so rare that a kid does pass before their parents that it is a terrible investment.

 

[windycitymom]

Whole or universal life insurance is a BAD idea for anyone! Insurance agents make a larger commission selling that than term, and insurance companies make more money in the end selling that. Why do you think Gerber tries to sell this junk to new parents?! Because they make lots of money if you bite! Dave Ramsey gives a great explanation on this in his FPU series and shows the dollar cost difference. It's not small, it's HUGE.

If you want insurance for your children, he recommends adding this as a rider on your life insurance and it costs only a few dollars a year.

Check around, and you will find NO financial planner recommends Whole/universal life insurance - they ALL recommend term insurance.

 

[mjkacmom]

Check around, and you will find NO financial planner recommends Whole/universal life insurance - they ALL recommend term insurance.

DH has been a CFP for 20 years, and no, we don't have any whole life policies. Our friend is a life insurance agent, and we got our term life insurance through him (million on DH, $500,000 on me). There is no way he'd even offer us whole life insurance.

 

[wendypooh]

WOW - we purchased the Gerber Life Ins. for DS when he was born - he's 11 now............ I had NO clue it was not a good idea............ so, by reading here - we should cancel it, get a rider on our insurance (which is term) and invest in some other college savings plan instead!!!

Anyone know of a good college plan?

AND - Thanks for this info, as I had no idea - I thought I was doing a good thing!!!

 

[SoonerSarah]

Has no one considered insurance for their kids in case they are diagnosed with something at some point in their life and are then no longer qualified for life insurance?

I know several families that the primary bread winner for their families has been diagnosed with something, all of them while they were growing up, and they now can not get life insurance. In their cases, if they would have had the insurance growing up, they would be able to have something that would at least help.

 

[bettymae1121]

You do not need life insurance for your kid. Life insurance is for grown-ups who have a family relying on them financially.

That said, the Gerber life insurance policies are also really, really bad investments. Put that cash into an Education Savings Account. You can contribute up to $2,000 annually, tax free. It's very similar to a Roth IRA. Or, for more flexibility, choose a 529 College Savings Plan.

To the PP, that sort of situation is what a well-stocked emergency fund is for. The Gerber Life Insurance Plans are serious rip-offs and it's so rare that a kid does pass before their parents that it is a terrible investment.

Well sure, in an ideal world we'd ALL have a years worth of income saved up for emergencies. But not everyone is able to do that, or their emergency funds were eaten up by other emergencies and the death happens before it can be replenished. Heck, DH and I are in the process of getting a years worth of expenses (not income, just bare bones expenses) saved up and I figure it will take us three years to do so, and we've got extra room in the budget to do that. A lot can happen in the time it takes to get savings established. As the saying goes, "life happens when you're busy making other plans".

I agree Gerber and other whole life policies aren't the way to go, but I see a lot of wisdom in getting a cheap term policy for children, or as another poster suggested, adding them as a rider to the parents term policies, especially if you don't have much in savings.

Lets say you can get a 20 year term policy on your child for $5 a month for $20k worth of coverage. In twenty years you'd spend $1200. If the worst happens and your child dies, you've got one less thing to worry about. If things turn out fine and you never need it, then you're out $1200. On balance, that doesn't sound like a bad deal to me.

 

[mjkacmom]

Has no one considered insurance for their kids in case they are diagnosed with something at some point in their life and are then no longer qualified for life insurance?

I know several families that the primary bread winner for their families has been diagnosed with something, all of them while they were growing up, and they now can not get life insurance. In their cases, if they would have had the insurance growing up, they would be able to have something that would at least help.

If one is at all worried that their child will be denied life insurance as an adult, instead of investing in a whole life policy, invest in some mutual funds. If the person is denied life insurance, that account will be a nice size.

 

[sorul82?]

Well sure, in an ideal world we'd ALL have a years worth of income saved up for emergencies. But not everyone is able to do that, or their emergency funds were eaten up by other emergencies and the death happens before it can be replenished. Heck, DH and I are in the process of getting a years worth of expenses (not income, just bare bones expenses) saved up and I figure it will take us three years to do so, and we've got extra room in the budget to do that. A lot can happen in the time it takes to get savings established. As the saying goes, "life happens when you're busy making other plans".

I agree Gerber and other whole life policies aren't the way to go, but I see a lot of wisdom in getting a cheap term policy for children, or as another poster suggested, adding them as a rider to the parents term policies, especially if you don't have much in savings.

Lets say you can get a 20 year term policy on your child for $5 a month for $20k worth of coverage. In twenty years you'd spend $1200. If the worst happens and your child dies, you've got one less thing to worry about. If things turn out fine and you never need it, then you're out $1200. On balance, that doesn't sound like a bad deal to me.

Great post!

 

[Cheshire Figment]

The way to price out any life insurance is look at the annual cost per $100,000. Gerber has one of the highest amount of any insurance.

By doing this comparison you will be able to compare apples to apples and not oranges, kumquats, or pomegranates.

So, for example, if they are quoting $10 per month ($120 per year) for a $5,000 policy that works out to $2,400 per $100,000 of coverage per year.