Gerber Life College Plan

[PantsOnFire]

Could these commercials be any lamer?  A bunch of morons sitting around lamenting the fact that they have NO IDEA how to save for their child's future.  These are people in their 30s.  Fortunately one person in the room is a smug genius, and found out that they can give their money to Gerber, and they are GUARANTEED to get AT LEAST AS MUCH back 20 years down the line!  What a deal! 

Not sure the specifics of this plan, other than it appears to be a combination of a savings account and term life insurance.  Who knows whether it's a good deal or not, but the commercials are most certainly annoying. 

[acanthurus]

Agreed. It's whole life insurance. For children. As featured on "Stupid Investment of the Week":

http://www.marketwatch.com/story/grow-up-insurance-is-stupid-investment-of-the-week-2011-03-04

[burly]

Yeah, they somehow got our names after my daughter was born.. It looked like a scam to me so I tossed it, never really read much into it.. But also, somehow they got our phone numbers and called my wife a few times? Do hospitals sell this information? Or perhaps baby registries?

[mensa]

Here's one way they figure it out:

http://www.nytimes.com/2012/02/19/magazine/shopping-habits.html?pagewanted=all&_r=0

[lisahi]

Here's one way they figure it out:

http://www.nytimes.com/2012/02/19/magazine/shopping-habits.html?pagewanted=all&_r=0

I buy toys, kid and baby stuff for my three nieces. Last year I started receiving Parenting Magazine... for free. I didn't sign up. They just started sending it to me, all creepy-like. Of course, at the end of the subscription they begged me to renew for cost. I gave the mags to my sister and didn't renew.

[brewer12345]

Here's one way they figure it out:

http://www.nytimes.com/2012/02/19/magazine/shopping-habits.html?pagewanted=all&_r=0

I buy toys, kid and baby stuff for my three nieces. Last year I started receiving Parenting Magazine... for free. I didn't sign up. They just started sending it to me, all creepy-like. Of course, at the end of the subscription they begged me to renew for cost. I gave the mags to my sister and didn't renew.

For some reason, I mysteriously receive a magazine that appears to be a sort of Cosmopolitan for the 50 plus female crowd.  I am a 39 year old male.

[Matte]

I kid you not They passed that crap out at my school when I was a kid, I remember doodling done innapropriate things on the baby and throwing it in the trash.  I would be pretty mad if my kid brought it home from school, that's no place for a greedy company to advertise.

[renbutler]

Greedy?

It's a horrible product that they're trying to sell. But what makes Gerber greedy? The pursuit of profits?

[MrsPete]

Years ago when I was still in college, I worked in a small office with a dozen or so women who were all very nice people . . . but all financial idiots. 

One woman was having a horrible time making ends meet, and she asked a couple of us to help her look over her budget.  Gerber Insurance for her child was one of her line items, and I pointed out that this isn't a very good idea.  I explained to her that IF her daughter were to die, she would not be losing any income; thus, she really didn't need to insure the child's life.  I did the math, showing her exactly how much this long-shot insurance was costing her each year -- and she was a person who didn't have a penny to spare.  She dug in her heels and explained that she NEEDED that insurance for her child!  That insurance was an unselfish, giving thing to provide for her child!  I again enumerated the reasons why she was highly unlikely to EVER see a return on this investment, and she just said, "Well, that's not the way it was explained to me."  She could not explain WHAT had been "explained to her", but she would not consider losing that item, even though her recent divorce had sent her back home to live with her parents. 

The worst part:  ALL the other women in the group who were mothers AGREED with her that this was a product that any sensible, loving parent would buy -- even if it meant financial sacrifice!  Not a single one of them really understood the purpose of life insurance, and none of them even came up with the lame excuse, "But what if I needed to pay for a funeral?"  They just had the idea that this is a product that good parents buy.  They all said I just didn't understand because I didn't have children yet -- but that I'd buy this product for my children one day too.     

[Mrs3F]

A friend of mine mentioned that she has this plan for her son (we both have 3 year olds) and I inwardly cringed.  It is such a horrible plan.  I've been wondering if there's a tactful way to tell her what a horrible investment it is.  We don't really talk about finances other than the vague "look how expensive these little people are" comments. 

She isn't asking for financial advice, but I wonder if there is some way I could raise my concerns without offending her.  I was thinking maybe I could bring it up in the context of my own financial planning, something like: "I was looking into that plan you mentioned, and was worried about XYZ.  How did you balance that when you chose this plan?" But even that feels like overstepping.   

Thoughts?

[Matte]

I think anyone's In public schools to push their product is greedy.

[huadpe]

Greedy?

It's a horrible product that they're trying to sell. But what makes Gerber greedy? The pursuit of profits?

Financial products are special.  With any physical good or service, there is always the possibility that someone likes the product/service so much that it outweighs them paying an outrageous cost for it, and therefore the purveyor cannot be said to be acting immorally.  In the case of financial products, there is the possibility (as in this case) that no buyer ex ante stands to benefit net of their cost.  Gerber is selling a product which they know for a fact to provide negative value to every single person who buys it.  They are pursuing profits by misinformation, not by providing value to a customer, because the product they are selling provides negative value.