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Q: Should I Have Life Insurance On My Children?

2011 June 20

Dave does not recommend buying life insurance on children especially Gerber Life and other plans that either try to act as a savings/college plan or to guarantee a child’s insurability into the future.  It is nothing more than just another method of selling cash value  (whole life) insurance, a poorly designed financial product, to people that “really” don’t need it.  Since the likelihood of a child’s  premature death is very rare, he feels this expense should be handled through the parent’s emergency fund.  However, since many people want to have some type of protection, a child rider that is part of an individual’s term life policy is the only alternative he feels is a reasonable approach.  Most company’s offering a child rider option charge $50 to 60 per year for $10-20,000 of coverage that covers all children in the household. When it is time for them to buy life insurance they will have the ability to do so even if they have health issues at that time.  It is a scare tactic used within the industry to try and imply the likelihood of never being able to get insurance which is a highly unlikely event. You can use these funds more effectively with better investment options such as ESA’s (Education Savings Accounts), 529 plans or just regular mutual funds.

2 Responses leave one →
  1. shirley segler permalink
    November 20, 2012

    THANKS FOR THAT ADVICE BUT THIS POLICY ISNT FOR OUR CHILDREN IT IS FOR MY HUSBAND AND MYSELF. IT IS 41.25 FOR ME 10,000 WHICH IS PAYABLE AFTER 2YRS ON ILLNESS BUT IF I DIE BEFORE THIS 2 YRS. ALL THE MONEY PLUS 8% IS PAID BACK TO MY BENEFICARY., WHICH I KNOW ISNT ENOUGH TO BURY ME AND DUE TO ACCIDENT OR INJURY PAID ANY TIME. THIS IS WHAT I WOULD LIKE YOUR THOUGHTS ON PLEASE.

  2. zanderins permalink*
    November 21, 2012

    It is a horrbile deal for you!! You did not mention your age but in most cases the amount you are paying for Gerber could get you $100 of thousands of coverage in level 15 or 20 year level Term Life. These plans are simply Whole Life policies that Dave NEVER receommends and are the worst of the worst since they are typically the most expensive when it comes to the per thousand of coverage cost. I would recommend visiting our online quote service at our website and compare pricng and get the amount of coverage your family needs. We are certainly available to help further with any questions.

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