Life Insurance for My Grand Baby

My stepmother brought this up to me when I was out on maternity leave with my first baby. I cannot tell you how offended it was. To give a gift that is only used if my baby DIES is really horrible.

I second the college savings plan..I guarantee that it would be much better received.

Why would you want to? I don't understand why they sell life insurance for children, children have no dependents. Maybe you or someone else could enlighten me on this, I have always found it strange, and a bit disturbing.

That does not benefit the baby. Start a savings account instead...

life ins for kids is a scam

You can, but I've heard that these are not very good values.

When my in-laws asked how best to contribute, we suggested that they contribute to a 529 plan instead. They did so, and it was a great way to get their future education fund going.

I would do a 529 plan instead. You can go to Edward Jones or some other financial place to set it up. It's to save for college, but at any time you can take the money out if say(God forbid) something happens to your grandchild, and you get every penny back that you put into it. That's what Suze Orman suggests.
I had a son die who was 3 years old. It's been 5 years now. His grandmother had a $50,000 life insurance policy on him, but actually didn't spend a penny on the funeral with it. I guess it's because her home owners insurance paid for most of everything. But still, if he hadn't died in her care and in her home, we would have needed that money. His funeral was $15.000 and his medical was well about $100,000.

Not a good deal. For that money you could do many more helpful things.
Save small for family pictures or little kids classes, like museam school. Save medium for orthodontic work or a family trip to Disney world. Save big for college.

Why? Babies don't need to be insured. That means the named beneficiary gets money when the baby dies, which isnt likely to happen. That doesn't benefit the baby. Do you mean to take out insurance on yourself and your grandchild would be the beneficiary when you die? I think a better option would be a college savings plan, where you could contribute a certain amount per month, tax free. You would not have to be dead for your grandchild to benefit from this money. Babies don't need life insurance. They need savings for their education.

Why not start a college fund instead? That would be more useful for the child in the long run.

There are lots of options if you choose not to go the route of a 529. We personally prefer the 529 and our daughter will start college in the fall of 2013. We started saving before she was born and we anticiapte her college education to be about $250,000 out of OUR pockets so that she graduates debt free.

We feel it is our obligation, as her parents, to get her out of college debt free. Any help from a grandparent, etc would have been most appreciated... Kudos to you.

You can insure someone that you have an insurable interest in. But why do you want to?

YES. Gerber markets to grandparents.

I've read a few of the responses saying that life insurance for children is a waste, scam, etc. My financial planner said the same thing. Then I asked, what if something happens to my child, how would I pay for the funeral, how would my bills get paid when I took off time from work? I would need to take out an unsecured loan, which usually has high interest. So for me paying a few pennies a day was well worth it, and he agreed. Of course, if the parents or yourself aren't in that situation, then go ahead and put those pennies away and when the baby goes to college you'll be able to buy a text book.

You can, but instead why don't you start an investment account like a 529?

It's very thoughtful of you to consider your grandchild in this way.

This is always a loaded question - many people are offended by it. Bottom line is we all know our birthdate but not our death date and everyone will die eventually. Its like WILL writing, Ive been telling my father for years to do one and he still wont cause it freaks him out. Its part of life and avoiding it isnt going to make it go away.

We have a family policy with a 'child rider' on our term life insurance policy - the price is something like $7 a month no matter how many kids we have they are covered for 10K or 15K I forget. No one likes to think about their child passing away but it can happen. When my 6 month old nephew died my brother was asking everyone for money, it was hard not to help him cause it was so sudden, that casket so tiny I think they ended up renting it. It was horrible as you can imagine. If one of my kids were to pass I would be secure in knowing I wouldn't have to ask others to help me pay to burry them. Thats why I have it to 'cover expenses'. Anyone offering you policies that are 100,000 or something insane like that is wasting your money. Kids dont need that much coverage. Agents in the 60s and 70s did that says it was a college plan.

I would suggest contacting your life insurance policy and see if they have the ability to add a child rider like that. Gerber is 'low cost' but its a whole life policy which in the end is a lot of wasted money. Get your self educated on the difference between term and whole life - the easiest way I can explain whole life is, your basically paying the face value of the policy, like a bill, your policy is 100K and the payments you make are paying towards that 100K. It earns 'interest' but you'd make more money investing in very very 'safe' fund in the stock market. Term is like car insurance - they pay out if something happens otherwise it does not 'earn anything' and if nothing happens you dont get it back. I used to sell insurance too and when kids are insured it is easier for them to get policies transferred when they become adults. I have a brother thats 15 and diabetic, if my father would get off his rocker and get everything done my brother would be able to transfer into an adult policy without an issue, but at this rate the poor kid would never qualify as an adult. They dont test kids so it does not hurt to get it now.

529 plans are nice to have but not life insurance its for college and only college.

Good luck in your search

Yes - and it's a good idea for a few reasons. It's a great financial tool when used right. And you don't know what will happen health-wise, so having it when you are young guarantees it will be there when you are older. My cousin is in his late 20's and has developed some kind of illness - they can't figure out what it is, but he is married and will probably not be able to purchase life insurance. My BIL has ulcerative colitis, is in his 30's. He got it when he was 14. He can get life insurance, but it is ridiculously expensive.

Talk to a financial planner about whole life insurance. Speak to someone at a AAA rated firm. 529 plans are also good - they are education savings specific. Insurance DOES benefit a child if it is the RIGHT kind and treated the right way - it does double duty (bond rate of growth, plus insurance benefit) and is for the LONG HAUL. I used to be in insurance so I understand how this works as a tool. I am no longer in the selling side, but recommend it because it is really an amazing thing when treated right. It has a "bad rap" because some idiots have mis-sold it, but real professionals know how to use it right and how to teach their clients how to use it correctly as well.

For a child it is inexpensive, grows over time, cannot be taken away as long as it's paid for, and if they have it for their lives it will augment their retirement and go to their kids - so it can be multigenerational.

IM me if you have questions.

Do a 529. We did that then also did the Gerber, I think, life insurance. That is very inexpensive.

why/ it is a waste of money. if you want to buy insurance to help the baby buy a policy for the baby's daddy. that way if he were to die.. money would be there to help feed and clothe the baby.

Gerber Life Insurance - that's what it's for!