I invested in a Gerber Life Insurance policy for my child when she was born. The policy is now hers and she can continue to pay in about $104 a month for a whole life insurance policy of $30K which rates never change for the rest of her life or she can cash out the policy balance ~$2500 and maybe purchase a term. What's the best choice for her at her age?
Gerber Life Insurance - Teen now 21 now what?
- Thread starter Amy Jones
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eersfan
Super Genius
- 200
$104/month? If that's the case, you have paid over $26,000 in premium for a contract with $2,500 in cash value.
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- #3
eersfan
Super Genius
- 200
Provided your daughter is insurable and she cashed in this policy, there won't be a taxable event happening since the cash value is below the total premiums paid. One question she needs to ask is "Do I need life insurance?"
Not to rub salt in a wound, but imagine if you had taken the same amount and put it in a savings account. Of course, hind-sight is always 20/20.
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- #5
eersfan
Super Genius
- 200
Don't beat yourself up...chalk it up as a learning experience
- 29,467
$104.00 a month sounds way to high for a 21 year old. Something desn't sound right.
- 11,272
Trust... but verify.
I don't believe that it's even POSSIBLE to pay $104 per month for 20 years and have ONLY $2,500 of cash values. Even non-participating whole life policies that have no dividend performance would HAVE to do better than this.
Plus, Gerber includes a paid-up additions rider in their premiums (last I checked) because it's used for "college savings", etc.
Is it possible that you left off a zero?
Or is it possible that $104 is for multiple policies, not just one?
I don't believe that it's even POSSIBLE to pay $104 per month for 20 years and have ONLY $2,500 of cash values. Even non-participating whole life policies that have no dividend performance would HAVE to do better than this.
Plus, Gerber includes a paid-up additions rider in their premiums (last I checked) because it's used for "college savings", etc.
Is it possible that you left off a zero?
Or is it possible that $104 is for multiple policies, not just one?
- Thread starter
- #9
- 5,778
Yes, there seems to be something missing here. This is when you need a white and black inspection... a review of your paper work, something is amiss.
That said, very few 20 somethings see the value of paying $100 bucks a month for something their not going to do... die. If there is a paid up portion (based on the numbers) you might want to look at using it as "no cost" coverage for rest of your child's life.
There is a cautionary tell of paying for life coverage for years only to turn it over to an irresponsible (maybe not your case) child or grandchild that either cashes it in without replacement or allows it to lapse for non-payment... hence defeating the very thing well meaning folks are tying to do.
