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Life Insurance for Children?

My husband wants us to get life insurance for our three kids. It's through Globe Life and is called the young American plan. It's a whole life insurance policy. I'm not sure if this is a good idea or not. Does anyone know anything about whole life insurance policies or anything about the cash value. If you cancel them, do you get a penalty, or can you get your full amount of premiums you have paid into them? Any thoughts or info on this?

Public Comments

1. omg. As mentioned in the book Invisible Bankers and on gobs of websites, these two things are dumb: 1) Life insurance on children. If they die, sad as it is, your cash flow actually increases. Buying a small policy now will have zip to do with their ability to buy one later as adults. 2) Whole life. No no no. Buy term life if you're an adult, whole life is a waste of money. Your husband could not be more wrong if he tried.
2. Life insurance for children does provide some benefits for your children, including: 1. Builds cash value for their future. 2. Provides guaranteed protection for them as adults. 3. Provides the option of increasing their coverage when they become adults. 4. Cannot be canceled because of health or future military service. 5. Loans can be taken from the cash value that builds within the policy. Globe Life has been around since 1951 and they are rated "A+" Superior by A.M. Best for financial strength. Globe Life has more than 2.5 million policyholders and they provide a 30 day money-back guarantee. You can apply for life insurance for all of your children online. There is no medical exam required, no need to meet with an agent, and you can start their life insurance policies today. If you want to learn more about Globe Life's Young American Plan visit http://www.term-life-online.com/life-insurance-for-child.html I hope that helps. Best of luck to you and your family.
3. I think it's a waste of money, and I don't insure my kids lives. Cash value is about 10% of what you pay in - AFTER a minimum of 5 years. Do the math. You do NOT get "full return of all premiums" that you pay in, unless a child DIES. If the goal is to pay for a child's funeral, buy the policy. If the goal is savings and/or investment, get a Schwab account and put your monthly payments in there.
4. I think it is a waste of money, terrible investment, and you can do better putting your money elsewhere. If you want life insurance on your kids, you can typically add a rider to your existing life insurance that will provide $10,000 of coverage on each of your children...total cost is typically $60-$100 per year, one price no matter how many kids you have
5. Globe Life insurance is whole life insurance. As you can see from previous answers, many people believe term life is the only way to go, but there are sound reasons for buying a whole life policy for an infant (see articles below). Whole life builds cash value as the policy—and the child—matures. Cash value is the lump-sum amount the insurance company will surrender to the policyholder if the policy is cancelled. The growth in cash value is slow but steady. As the cash value of a whole life policy grows, it offers the policyholder financial options. For example, the cash value can be used as collateral for a loan. It also can be withdrawn by in the form of a loan that the insured makes to himself or herself. This is particularly helpful when the insured needs cash but has poor credit or has maxed out other assets, such as home equity. The term lifers will sneer at these benefits, arguing that you can do better by investing your money in something else. However, to earn those greater rewards, the term life policyholder must take greater risks in the open market. Many investments will outperform whole life insurance, but not all will. Some investments lose money, as shareholders in World Com, Enron, Peregrine Systems, and many other companies can attest. Even if the investment will pay out, it is not certain that the term life policyholder will actually fund the investment on an ongoing basis. To do so, he or she must calculate the amount saved over whole life insurance; save that money every month, quarter, or year; research possible investments; and contribute to that investment regularly for 20 or 30 years. This makes sense for disciplined and savvy investors, but many others will find the endeavor daunting and time consuming. They may not start it, and if they do, they may not continue it. Whole life takes care of insurance, savings, and investment in one easy payment. Even if the returns on whole life are not great, saving something is better than saving nothing. The great thing about life insurance for newborns is the relatively low cost. Since insurance rates are based on age and health, the lowest premiums are reserved for the youngest, healthiest members of the population. With whole life insurance, the newborn’s low premiums are locked in for life. Some companies allow the policyholder to increase the face value of the policy on certain anniversary dates, such as the child’s twenty-first birthday, without increasing the premium.