Is gerber life insurance worth it?

Commercials about Gerber Life Insurance Grow-Up Plans run frequently and leave parents wondering whether or not it’s wise to buy life insurance on an infant, toddler, pre-teen or teen. It may sound a bit morbid to insure the life of a minor, but the purpose of buying life coverage on your little one or your grandchild goes well beyond the death benefit. Compare life insurance rates now by using our FREE tool above!

Before you rush to throw away the brochures and postcards you receive in the mail, you should learn about the savings components that are built into the whole life plan before you discount its value. You should also learn about the riders and how the Grow-Up plan is structured to decide if you want a Gerber product or if you’d prefer to go with another provider. Read this guide and you’ll be equipped with all of the information that you need to make an informed consumer decision.

When does is make sense to buy insurance on a child?

You might think that there’s no right scenario to buy life insurance on a child, but that assumption can be damaging. There are two very different types of life insurance on the market and one of these is appropriate for children while the other isn’t. If you’re considering buying term life insurance on your child, think again.

Term life policies only provide pure life coverage that lasts for only a specified period of time.

A permanent life insurance policy, however, includes pure life coverage and an investment component that allows the policy to grow cash values. Since these policies last a lifetime and provide financial benefits, it can make sense to buy children permanent life insurance policies.

What is a Gerber Life Policy?

A Gerber Life policy is a permanent whole life insurance policy that’s available for only babies, children, and teens who are still minor and who are between 14 days and 14 years old. This whole life policy provides a small death benefit, between $5,000 and $50,000, and the policy itself builds cash value over time. The policy itself offers several unique benefits to both parents and the covered child once they become an adult.

What is a whole life insurance policy and how does it work?

A whole life insurance policy is the first type of permanent life insurance that hit the market and it remains the most popular option today because of how the policy is structured.

When you buy whole life coverage, the named insured will receive the death benefit for the remainder of their life as long as the premiums are paid.

The premiums charged are based on the age of the insured at the time of application. When the premiums are paid, they will be applied to pure insurance costs, the company expenses, and cash value account. The named insured is free to take out policy loans, withdrawals or leave the cash accumulation in the policy so that the death benefit and the total cash value are paid at the time a claim is filed.

What are some of the special features of a Gerber Life Insurance plan?

There are a few different features of the Gerber Grow-Up Plan that are unique to this product. While all whole life plans offer you locked-in rates at the age of application and savings components, the Gerber plan is perfect for parents who want to offer their child a financial vehicle that will help them when they’re a young adult. Some unique features of Gerber Life plans that you should know about include:

• At 21, the child becomes the policy owner and has the choice to keep the policy, request a payout, or take out a cash loan on the policy
• When the child turns 18, the coverage automatically doubles with no increase in premium
• After turning 21, the insured has the option to purchase up to 10 times the original amount of coverage at the company’s standard rate

What are the advantages of buying Gerber Life insurance for children?

There are a lot of misconceptions about buying life insurance for children, buy you should educate yourself with accurate information before you trust everything you’re told. It’s extremely responsible for a parent to carry enough coverage to cover unexpected final expenses, but it’s also responsible that you begin to save for your kids while they’re young. Here are some of the obvious and not-so-obvious benefits of Gerber Life plans:

• Indemnify Yourself From Financial Loss: You never want to even imagine a minor child passing away, but part of financial planning is preparing for every scenario. At its most basic level, these plans can help indemnify you so that you can pay for final expenses, time away from work, grief counseling, and donations to charitable causes.

• Guaranteed Insurability for the Future: You don’t really think about whether or not your child will be able to buy life insurance in the future, but there’s a chance they won’t qualify. No matter what your age, you are just one doctor visit away from not qualifying for coverage. A chronic illness, a bad diagnosis, tobacco use, drug use and hazardous avocations can all affect your child’s ability to buy insurance.

If you get coverage now, you’ll know they have the small benefit that doubles at 18. You even know that your child can be responsible and elect to buy a policy worth 10 times the benefit that you chose. If you don’t take action while they’re young, it could be that your child will never be able to buy individual insurance when they become an adult. Guaranteed insurability is a benefit you can’t ignore.

• The Policy Accumulates Value: There are so many different savings vehicles that you can choose from that earn interest and the grow over time. While there are a lot of options, none of them offer both a death benefit and a vehicle where you can enjoy tax-free growth. If preferential tax treatment is something that’s on your list while you compare investment options, highlight the Gerber plan.

Not only does the cash grow inside of the policy tax-free with compound interest, it’s a source of liquidity that you can actually borrow against and pay back. Unlike other risky vehicles, you will earn about 4.5% interest over the long term without having to worry about the risk that comes with other types of investment options.

What will the value of the plan be worth when your child is an adult?

One of the main questions you should ask is “When will the policy be worth the amount that you paid into it?”. If you’re looking at cost and overall value, this might be the only question you need an answer to. What you need to know is that your cash values will match what you’ve paid into the policy once it’s been active for 25 years.

So if you’ve paid $20,000 over 25 years, that policy would have a cash value of $25,000 at that time. After the 25th year, the accumulations in the policy would be all gains.

There are other vehicles that report similar growth, but none of them offer the life benefit and the growth like a whole life plan does.

In the end, whether or not a Gerber Grow-Up plan is worth the costs depends on your goals and your perception of the advantages. Many people are all for buying life insurance for long-term savings while others are against it. It’s your choice to research the tax advantages and growth to make a decision. If you’d like to price the cost of Gerber life and other whole life products, use a rate comparison tool online and get started. After you see how affordable it is, you might be ready to make a decision. Enter your zip code in our FREE tool below to start comparing life insurance rates now!