All Life Insurance Tips - Gerber Life Insurance for baby?

Gerber Life Insurance for baby?

Do you think this is a worthwile investment? My husband and I aren't great at managing money, but want to make sure that by the time our 4 month old son gets ready for college we have something saved up for him. I requested more information from the company. It seems like a good investment, doubling coverage after the age of 18. Any parents/grandparents have experience with them? Thanks in advance!

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I haven't used Gerber, but what we did is got ourselves plans from Prudential and made my husband's policy the family plan so that it covers our daughter. If you don't already have insurance you should check on it. We just got term for 20 years because within 20 yrs our daughter will be old enough that she can manage.
It seems like a good investment for us. We got Gerber Insurance for our little girl and plan to get it for our son once he is born.
A simple answer: Its a rip off. Basically its a whole life policy where your premiums are paid for two things: The insurance and the cash value. While premiums may seem very low (about $216/year for $25,000 coverage), a 35 year old man that is healthy can purchase a 20 year term policy with $250,000 for about the same price! In the first 2 years of the policy, no cash value is accumulated. After that, you will get 1 to 3% interest on the cash value. I'm not sure how they determine how much of your premiums goes into the cash value. When your child reach age 21, ownership of the policy is transferred from you to your child. If you (or your child at age 21 or older) wanted take money out of the policy, you can borrow from the cash value. You will be charged 8% annual interest. When you pay this loan back, the interest goes to the insurance company. It's similar to you withdrawing money from your savings account, but the bank giong to charge you daily interest until you put the money back. If you or your child cancels the policy while there's a loan balance due, you will be responsible for income tax on the loan balance if the child is under 21. If the child is 21 years old or older, your child will be responsible for income tax on the loan balance. Surrender charge will apply on the cash value if you or your child cancels the policy. If the child dies and there is a loan balance, this amount plus interest plus missed premiums will be deducted from the face amount of the policy. All the cash value is kept by the insurance company. In summary: 1) Its very expensive. 2) It gets a very low rate of return 3) No withdrawals allowed. You either borrow and pay 8% interest OR cancel the policy and pay surrender charges. 4) Lose cash value upon death of the child, but at least they pay the death benefit to you. 5) One policy per child My recommendation: Get a term policy on yourself. Most people only need 20 years. Some need 10 or 30 years. Financial experts say you should get coverage of ten times of your gross income. But every situation is different, so I would go with a company that can find the exact amount of coverage you really need or determine the amount of coverage you need by yourself. A good start would add all your debts. If you have $300,000 in total debts, then you going to need at least $300,000 in coverage. A 35 year old who is healthy and gets a 20 year level term with $300,000 coverage will cost about $20 to $25 per month. I own a 20 year level term with $250,000 coverage at age 23 and pay about $18/month. If you are married, add a spouse rider to your policy. If you really want to put coverage on your child, you can add a child rider with a minimum of $5000 coverage to a maximum of $25,000 coverage. A child rider covers all children from 14 days old to age 25. At age 25, the child can get his or her own life insurance, regardless of health status. By adding these riders, your entire family can be protected in one life insurance policy. If you were to get individual life insurance policy for each member of your household, it will cost you lots of money. I don't know your other goals, but I'm guessing retirement and funding your child's higher education (college) are 2 of the things you want to accomplish. Its kind of impossible for me to tell how much you need to save every month to accomplish both these goals. But I can give you some pointers. For retirement, you want to open a Roth IRA. You want to invest in mutual funds because mutual funds has historically out-perform the stock market in the long run. I invest $400/month in 4 different mutual funds. If the average annual return on my investment is 10%, in 20 years I will have about $306,000 saved. I would be 43 years old and plan to retire at age 60. So at age 60, I will have about $1.8 million. I'm being conservative with 10% because the mutual funds I have done 14% average annual return from 1980 to 2009. I don't have any kids, but if I did, I would open a 529 plan for my child to fund his or her higher education. There are other plans that can accomplish this goal such as Coverdell and UGMA/UTMA accounts. A Roth or Traditional IRA can even fund for your child's higher education, but I would only use an IRA for retirement.
Thanks Finance1, I was considering that as well but not after what I've read. I'll keep her money in her piggy bank if I have too.
I honestly believe in life insurance, and I like Gerber for it's long-time business without anything seeming to go wrong. Not that others aren't good either, what's important is you have it. We have the $15,000 for my daughter right now ($10 a month) and plan on doing the same when our son is born. The idea that it doubles to $30,000 when they're 18, that they can increase it no matter the state of their health, and that they're not going to be charged a huge amount. I have a sister-in-law who has MS, a niece right now who has undefined fainting (they're not sure what it's about) and a few other things in the family that make insurance more difficult for them to get. I look at this and think it's just a good thing. And then there's the unthinkable. If my daughter was to die... I'm going to break down. I don't want to have to think about burying her or fight others about how I would want to bury her, not have to cremate her or something. That's more expensive, and I don't want to have to think about any of that. My mom has buried 2 of her children. One of them, they didn't have the money and the arrangements were less than she wanted. I don't want that. So our experiences have been very good. I remember seeing them around for the last 30 years, and have never heard bad experiences.
If you are saving for college, then I suggest a college savings plan. I started a 529 when our son was born. Googeling will provide you with the top 5.
Mom did it for me, doing it for my little girl
This is a LIFE INSURANCE policy, not a college fund. All it is is money for you in case your child dies in order to cover funeral costs and medical bills. You can borrow cash against it after a certain point but the interest is crazy. If you want to save for college open your child a savings account and have money transferred every month automatically.
well what my husband and i plan to do is when we get our taxes is to keep the money for them every year its extra money anyways and we get more from them so it helps us keep up with it too