Child's life insurance

May 21, 2019

  1. InviewFinancial
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    InviewFinancial Expert

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    Hello
    me and my wife are covered up to 2 mil each. some of ( Whole, GUL and some Term)

    We have bought a WL 20 Pay $400K with Penn Mutual for our child who is 2 and half year, which costs us $2000 for a year.
    i want to set aside total 1mil policy for my daughter but want to diversify.

    I would like to get another 600K in 20 PAY GUL with prudential which my advisor quoted , 1250/month.

    Q1) i asked for a The Benefit Access Rider , but Prudential has minimum age of 20 for that rider.
    i just want to make sure i get the right policy with right riders if available. as with my wife i have learnt she will not be qualified to get The Benefit Access Rider any more with Prudential due to her RA.
    are there any riders available to children;s policy with other companies which are similar.
    Prudential does include "Living Needs Benefit Rider" but i want something better.

    Q2) instead of putting cash in savings or put money in stock market, i want a guaranteed return, and that is the reason i am getting WL and GUL for my daugher and also getting it paid up in 20 yrs.
    are these two policies the best for what i want to achieve?

    I do not want to leave much cash , but want to leave her with paid up policies.

    Q3) any other suggestion . little investment but big guaranteed return. total cost in 20 years for 1 mil will be
    (2000 * 20 ) = 40000 (WL)
    (1200 * 20 ) = 24000 (GUL)
    total 64K and will have 1Mil paid up policy when she turns 22.

    My wife does have RA and now limited options for getting new policies. so just want to be early and take care of my children as well.
     
  2. pfg1
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    pfg1 Guru

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    Its late to the party now on the WL, but personally I like the life pay option max funded, then at whatever point you can RPU if you want (or keep it rolling if you don't want to shut it off). Either way its a good thing you did and will be an awesome thing for her down the road for sure.

    For the Pru, I don't know... don't do much with them. I do know that Penn just lowered its GUL pricing very recently, they are ranking really well now in that space.

    The investor side of me says put the other $1200/yr to work in the market vs doing the GUL, but that is me. At life expectancy she'd probably have $2-3Million in that account, just from the $1200/yr for 20yrs.
     
    pfg1, May 21, 2019
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  3. InviewFinancial
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    Can you elaborate more on the 1st paragraph. i am not understanding .
    Q1) Its late to the party now on the WL,
    Q2) personally I like the life pay option max funded
    Q3) you can RPU if you want

    also one question
    1) do i need to own the policy in a way that it DOES NOT automatically become my daughters. I would like to keep ownership and preferably pass it to my wife before it ever directly is handed to my daughter. (this is to make sure i am not giving a drug addict or some phyco)
     
  4. Rob Lion
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    I'd look into Protective over Prudential it's cheaper, and why not look into overfunding a whole life or IUL?
     
    Rob Lion, May 21, 2019
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  5. pfg1
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    Q1 -You said you already bought a 20 pay. That means you only have the option to pay for 20yrs.
    Q2 - If you set up a life pay policy at max funded, typically it will have stronger accumulation than a fixed term short pay. Plus you have the option to continue to pay on it if you want beyond that 20yr mark.
    Q3 - RPU means reduced paid up. You basically turn the policy off, no more premiums can be paid in. The DB is reduced down and the policy is paid up.

    The policy would not go to your daughter unless you assigned it over to her, or she inherited it through your estate. So yes you can control that until you are ready. You as the owner, wife contingent owner. The key with a policy like this is to help your daughter understand what she really has before she ever gets it. Last thing you want her to do is cash it out. Obviously you have a long time before you have that conversation.
     
    pfg1, May 21, 2019
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  6. pfg1
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    pfg1 Guru

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    Most companies offer living benefits similar to what you are stating. Some even offer critical illness as well. For many it isn't available until they are older. You have to request to have it added on when they attain the eligible age, and they typically have to qualify health wise at that time. I know Penn is also age 20.
     
    pfg1, May 22, 2019
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  7. jerryrut
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    Are you an agent and haven’t figured out that life insurance is not an investment????
     
    jerryrut, May 27, 2019
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