Bradley S
|
Gerber life insurance is whole life insurance. Many people believe term life is the only way to go (see article in sources below) but there are sound reasons for buying a term life policy for an infant (see the other article 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 It also can be withdrawn by in the form of a loan that the insured makes to himself or herself.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 make it. 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, and nothing is exactly how much many term life policyholders will end up saving.
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. |
mbrcatz
 |
I think it's a waste of money. Sure, you can cash it in after 21, and it might even be worth $250.
Run the numbers. Multiply your monthly payment by 21 years. Even without interest, you're ahead of the game if you stick the money in a cookie jar. |
aaron p
 |
If you're buying this policy in order to have cash value, your goals may be misplaced. If you are buying it to actually have life insurance on your children, that you would be able to continue later in life regardless of their health, there may be better ways to achieve that goal. Check with an independent insurance broker or a financial planner. |
tigerlambs
|
Not really, as Gerber did not have this program 21 years ago.
However over all I think it is a good policy, and one that will be benificial in the future. If you are looking for something to provide for your children, you may want look at developing your own home based business.
I wish you luck |
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