Author Topic: Gerber Life Grow-Up Plan life insurance  (Read 2827 times)

LibrarIan

  • Pencil Stache
  • ****
  • Posts: 537
Gerber Life Grow-Up Plan life insurance
« on: November 08, 2021, 08:22:50 AM »
We received a pamphlet in the mail for this Gerber Life Grow-Up Plan life insurance (https://www.gerberlife.com/child-life-insurance/grow-up-plan). Basically it is whole life insurance. The earlier you start a policy, the lower the monthly premium. (For example, if your child is one year old you will pay $3.40/month for $5k coverage. If they're two you pay $3.50/month, etc.)

Our son is one is and the only life insurance coverage he has right now is Dependent coverage from my employer which is $2,000.

My wife wanted me to ask around about this. Has anyone done whole life insurance for their child (through Gerber or not)? One interesting thing about this sort of insurance is that when the child turns 18 the kid has the option to continue coverage, buy more, or turn in the policy and get its cash value.

Morning Glory

  • Magnum Stache
  • ******
  • Posts: 4867
  • Location: The Garden Path
Re: Gerber Life Grow-Up Plan life insurance
« Reply #1 on: November 08, 2021, 08:45:02 AM »
I think the consensus here is that life insurance on kids/dependents is generally pointless. Losing a child is awful but it would not put you into financial ruin unless there were huge uncovered medical costs or something, and if that happened then $5k would not make much difference.

LibrarIan

  • Pencil Stache
  • ****
  • Posts: 537
Re: Gerber Life Grow-Up Plan life insurance
« Reply #2 on: November 08, 2021, 08:54:13 AM »
May or may not make a difference to your reply, but the $5k coverage was just an example of an amount. Max coverage with Gerber appears to be $35k.

Dicey

  • Senior Mustachian
  • ********
  • Posts: 22320
  • Age: 66
  • Location: NorCal
Re: Gerber Life Grow-Up Plan life insurance
« Reply #3 on: November 08, 2021, 08:54:30 AM »
I think the consensus here is that life insurance on kids/dependents is generally pointless. Losing a child is awful but it would not put you into financial ruin unless there were huge uncovered medical costs or something, and if that happened then $5k would not make much difference.
Nailed it.

secondcor521

  • Walrus Stache
  • *******
  • Posts: 5503
  • Age: 54
  • Location: Boise, Idaho
  • Big cattle, no hat.
    • Age of Eon - Overwatch player videos
Re: Gerber Life Grow-Up Plan life insurance
« Reply #4 on: November 08, 2021, 10:55:33 AM »
We received a pamphlet in the mail for this Gerber Life Grow-Up Plan life insurance (https://www.gerberlife.com/child-life-insurance/grow-up-plan). Basically it is whole life insurance. The earlier you start a policy, the lower the monthly premium. (For example, if your child is one year old you will pay $3.40/month for $5k coverage. If they're two you pay $3.50/month, etc.)

Our son is one is and the only life insurance coverage he has right now is Dependent coverage from my employer which is $2,000.

My wife wanted me to ask around about this. Has anyone done whole life insurance for their child (through Gerber or not)? One interesting thing about this sort of insurance is that when the child turns 18 the kid has the option to continue coverage, buy more, or turn in the policy and get its cash value.

For what they're charging you, it's an utter waste of money.  Go look at any third party death statistics for the US - children between the ages of 1 and 18 really just don't die very often.  As a quick check, Social Security says that out of 100,000 baby boys, 98,974 will be alive at age 18.  For girls, the number alive at 18 is even higher.

And this is across the entire US, which includes people who live in inner cities and have to deal with gang violence, and people who for whatever reason can't or don't seek proper medical care, and people who don't put their kids in car seats or teach them to swim or not drink and drive.  I think it also includes a lot of kids who are born with serious health issues, like heart defects or genetic abnormalities that your kid probably doesn't have and Gerber probably excludes from coverage anyway.

If you and your wife put your kid in a proper car seat, teach them to swim and/or put proper safeguards in place if you have a pool or hot tub at your place, and you seek proper medical care for your kid, then your particular kid's life expectancy is even higher.

On the other hand, that $3.40 a month over those 18 years is $734.40, for which, if your kid is one of the really unlucky 1% (or probably less), then you get $5K.  (If you want to dial it up to the $35K, then I'm betting that the premium rises proportionally anyways, so the analysis is the same.)

And that's ignoring what that $734.40 could have done in the market.  Even at 5% growth, which you could get with a common sense 60/40 fund, you'd end up with $1,289.78.

So do you want to pay $3.40 every month for a 1% chance of $5K, or a 100% chance of ending up with $1,289.78?

As for the "interesting thing" - of course Gerber is going to give you the "opportunity" to give them more of your money for subpar insurance and subpar returns!  It's an opportunity in the same way Tom Sawyer offered his friends the opportunity to whitewash the fence (https://www.pbs.org/kenburns/mark-twain/tom-sawyer if you're not familiar with the story).

Sibley

  • Walrus Stache
  • *******
  • Posts: 7428
  • Location: Northwest Indiana
Re: Gerber Life Grow-Up Plan life insurance
« Reply #5 on: November 08, 2021, 02:50:05 PM »
They are preying upon your emotions. "why don't you want to have life insurance on little Timmy? don't you want to be able to bury him if something happens?" Yeah. It's really that gross.

And while I sympathize with Hiro, don't buy insurance just because your child may end up disabled in future and be unable to buy life insurance.

The purpose of life insurance is if you croak, the people you're supporting don't starve. A baby isn't supporting anyone.

solon

  • Handlebar Stache
  • *****
  • Posts: 2359
  • Age: 1823
  • Location: OH
Re: Gerber Life Grow-Up Plan life insurance
« Reply #6 on: November 08, 2021, 03:03:55 PM »
There is an economic argument to be made for life insurance for children.

If a child dies, you are out the cost of burial and final expenses. But you're also out the cost of raising that child up to that point. Think about all the food, clothes, cribs, beds, diapers, furniture, school, clubs, sports, doctor visits, camps, etc. If you bought enough life insurance to cover all that, you would be made whole in the event of their death.

I'm not saying it's a great argument, just that there is one.

secondcor521

  • Walrus Stache
  • *******
  • Posts: 5503
  • Age: 54
  • Location: Boise, Idaho
  • Big cattle, no hat.
    • Age of Eon - Overwatch player videos
Re: Gerber Life Grow-Up Plan life insurance
« Reply #7 on: November 08, 2021, 04:29:16 PM »
There is an economic argument to be made for life insurance for children.

If a child dies, you are out the cost of burial and final expenses. But you're also out the cost of raising that child up to that point. Think about all the food, clothes, cribs, beds, diapers, furniture, school, clubs, sports, doctor visits, camps, etc. If you bought enough life insurance to cover all that, you would be made whole in the event of their death.

I'm not saying it's a great argument, just that there is one.

I disagree.  The above is exactly backwards logic.

If you lose a child, you have to pay, say, $10K to bury them.  But you do not have to pay for the rest of their upbringing, which could amount to, say, $200K.  While I know losing a child is a horrific experience, the cold hard truth is it's perhaps a $190K financial net gain.

There is absolutely zero sense in insuring against scenarios where you come out ahead financially.  Said another way, there's no sense in insuring against situations where you don't have to spend money.

(This is ignoring any big medical expenses associated with the child passing away, and any sequelae such as counseling, divorce, alcohol, etc. which might happen.)

Villanelle

  • Walrus Stache
  • *******
  • Posts: 6657
Re: Gerber Life Grow-Up Plan life insurance
« Reply #8 on: November 08, 2021, 04:33:00 PM »
There is an economic argument to be made for life insurance for children.

If a child dies, you are out the cost of burial and final expenses. But you're also out the cost of raising that child up to that point. Think about all the food, clothes, cribs, beds, diapers, furniture, school, clubs, sports, doctor visits, camps, etc. If you bought enough life insurance to cover all that, you would be made whole in the event of their death.

I'm not saying it's a great argument, just that there is one.

Huh? That money is a sunk cost.  How does the death of the child someone mean you should be reimbursed for having spent money raising the child?  It's not like diapers and a tricycle are some sort of downpayment for... a health adult offspring, I guess is your argument.   Never mind that in the mercenary outlook on things, you actually *save* money by not having to pay for band uniforms and teenage grocery appetites, so you actually save money if your child dies. 

Ick.

eyesonthehorizon

  • Handlebar Stache
  • *****
  • Posts: 1001
  • Location: Texas
Re: Gerber Life Grow-Up Plan life insurance
« Reply #9 on: December 05, 2021, 09:40:04 PM »
I actually think they're preying on your emotions PLUS illogic - not so much "what if something happened to little Timmy & you couldn't afford to bury him," but a sort of magical thinking that purchasing life insurance is somehow associated with keeping that child well, spending as a form of caregiving to/ for that child: "You wouldn't want anything to happen to little Timmy (so act like it & pay up.)"

It relies on people not really actually broaching the scary idea of "something happening" to think the process/ purpose through, but this is true of a whole lot of marketing generally.

yachi

  • Handlebar Stache
  • *****
  • Posts: 1141
Re: Gerber Life Grow-Up Plan life insurance
« Reply #10 on: December 06, 2021, 06:41:31 AM »
I have a vague recollection of my mom telling me she had such a policy on me like 16 years ago.  I didn't do anything with it, would the cash value still be there, or did the whole policy get forfeited because I didn't continue it?  Basically what happens if the parent thinks the child is continuing the policy and no one is paying it?

marion10

  • Bristles
  • ***
  • Posts: 390
Re: Gerber Life Grow-Up Plan life insurance
« Reply #11 on: December 06, 2021, 09:58:50 AM »
About 30 years ago I got about $1000 from Virginia's unclaimed property office because my grandmother had bought a small policy for me and it lapsed - but still some cash value.