Whole Life for Child ?

[WinoBlues]

The same dictionary does not say insurance is permanent or builds cash value. Term, UL and WL are all insurance.

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[Ron Van D]

Are you going to be specializing in only Child life insurance? There really is little benefit from investing in those. I would rather see a parent invest in life insurance for THEMSELVES so that the child would benefit (child usually depends on the parent in most cases..) in the event of a parental death. Infact, speaking from a strictly financial standpoint, people who fear the "undue burden of costs" related to a child dying (funeral costs and such) infact are saving money in long run. They are no longer paying for the child. People are acting like a child's funeral is so expensive and they would "never be able to pay it" if it happened, well if you can't afford a possibly tragedy of a funeral for your kid, its a hell of a lot more expensive to raise a kid!
Some people say it has advantages because the child will have life insurance if one day he needs it for his family, but I just see that as looking way too far in advance.

Easy to say until it's your kid that gets diagnosed with juvenile diabetes.

The priority should be raising the child and providing for a future in hopes he will succeed (college, down payment for house one day, etc) not that he will die. Most twenty year olds do not have issues getting life insurance, and to be paying into something since the they are a new born,(imagine what you would have saved if you put that in a bank account) that money would probably equal out if he just started a life insurance policy of his own when he has his own family.
If you are trying to sell someone something like this as an insurance broker, which it seems that is your new job, it seems most of these guys are working the emotional angle on the parents. The odds are, most children are healthy, and purchasing life insurance in the chance they will die and the parents can't afford a couple thousand to bury them, probably shouldn't have kids anyway, because children are a burden, and cost a lot more to live than the couple thousand (tops) it may cost to bury them.

Having seen the emotional devastation to my relatives when their only child was killed at 4 years old, I will tell you that the year off from their jobs to emotionally rehab was only possible because of the death benefit from insurance.

 

[keith48]

Last time I checked, signing up for the site didn't require insurance licensure. I came on here to see what that Gerber grow up scam was all about, and learned there is other companies that may be more reputable. I can voice whatever my opinions are, and I just felt that it's throwing good money after bad for the very low chance a young child will die or be unable to acquire insurance when he is twenty something. You all have valid points and yes maybe 250 thousand dollars would cover expenses for some, but realistically if a family member dies taking months and months off work isn't reasonable. that's all. And the amount of money these companies are making off the emotional appeal is astounding.
On a lighter note, What a e your thoughts on health insurance? Shouldnt that trump life insurance? The odds of child getting sick is quite higher than death. Do you all agree that you must insure yourselves before insuring a child? If not, what would be of the child with out parents? how are we protecting them in the event of a catastrophe ?

This is exactly why it is so cheap to attain when they are children. The rates reflect the risk.

I bought whole life policies on my children when they were babies. When my oldest was 11 years old in September of 2011, he was diagnosed with a rare bone cancer called Ewings Sarcoma. Through a miraculous event, God healed him immediately and the tumor went from being the size of a golf ball to completely GONE instantly. I am thankful for that and have an entire website devoted to our journey where I blogged it as it happened.

Yes, the risk for it happening is very remote. But there is risk. I had to stop working almost completely to provide care as our insurance was through the school system where my wife worked (she is quitting and coming home to homeschool starting in the fall). It was devastating financially, but we made it through. If something had happened and we lost a child, the emotional toll would have likely kept me from being able to get back to work for some time.

But what if I had not bought the insurance? It would have been years after his final treatment before he would qualify for decent insurance rates. When he starts a family and is on his own, he will need to buy additional insurance (term) to cover his family, but he nor his family will ever have to worry about final expenses. When he gets married, I will turn over ownership to him and he can list his wife as the beneficiary.

I never in a million years thought we would go through this journey we went through. But we did, and THAT is what insurance is all about. If you are trying to convince me that buying insurance is a bad idea, you're too late to convince me. I have lived it out and know otherwise, my friend.

 

[Rez]

Good post, blue.

And here's some thoughts just off of the top of my head while reading this thread:



Heh.

So, to take your scenario, let's say the couple is pulling in the absolute median US household income of ~50k/year as a couple.... gross. Not the ludicrous 50k/mo as you point out that would need to be covered with such an inflated benefit amount (in your mind)...

Say that they net roughly 36k of that figure annually. So that's only 3k/month. Clearly, many couples earn [much] more that would need to be covered, but we are talking averages for the sake of discussion and I digress...

Well, the couple would then only need maybe a few months at 3k + burial expenses, let's say a 'generous' 30k should suffice to cover both amounts, correct?

By then (5mo or so), the couple would surely have moved on and returned to work, if not earlier. I mean, why miss any work at all in the first place, right?

30k to 100k/250k... certainly the disparity seems a bit much, no?

Well, avoiding the future insurability points that have been reiterated with good reason, what if the couple *gasp* took longer than that to return to work?

How long a couple *should* take... I'm glad I have no first-hand experience with that. Maybe, as it has been said, it is more than just a few months. Maybe a spouse (or both?) falls into a debilitating depression and cannot work - by his/her own admission or by an employer deciding enough is enough - they require an employee not a wet mop (unless the employee is a janitor)...

Those months can quickly rack up, as can the debts created by the delta in the income. Even if the spouse(s) were to eventually pull together and return to the workforce (at the same job? making the same salary?), the couple could be faced with debts + fees + interest that must be caught up on - let alone grief counseling and/or mental health expenses.

The expenses and lost income can easily start to approach or exceed 6 figures at some point. Who is to say how long it would take for a spouse to return to work? Should one, according to you, just get over it quickly (two months, tops!) and move on?

All this could/would be fallout from one, singular death event - and it is assuming the employer holds the jobs as long as need be...

Now, as you point out, they should have certainly have returned to work in a month or two.... or what? Risk losing one or both of their jobs.

Let's say the employer's hand is moved - "Two months out is just too long for our operation, we've had to hire someone else to do the job, sorry."

Now one or the other or both are out of work.

Is there a similar (local) job requiring a similar skill set paying a similar salary (with similar benefits) immediately available?

How easy is it to find a job in this environment? How bad have certain markets become? Did it take years for one to get to that former position and work their way up a ladder no longer available? Has the education or skills needed for the former job fallen out of demand in the years spent working there? Will it take months (post-grief, out of work, without income) of searching to be able to find a job that can meet the former's income level? Could a similar job that is available pay less - indefinitely? Will the benefits available at the new position be worse or none-existent? Will the new job be less flexible, and now require childcare for the other sibling(s) when formerly that was none-issue? Will it require travel? How about relocation?

What if there's no way around it - the spouse must enter or return to some sort of schooling to be marketable at this point. That requires the obvious time without income to go to classes, and can take years. Will loans be required? Is college even an option? Is there a local program? Blah blah blah blah

Let's not forget the child could have also incurred medical treatment expenses prior to their passing. Maybe the child is in an ICU-type environment, after all the ER expenses of course, for an extended time, and a following step-down care center to treat their comatose state that they never recover from until they ultimately pass. Could these or similar expenses easily surpass 100k? 250k?

Could dealing with these issues cause foreclosures, bankruptcies, divorces, etc? Who will pay the legal fees and how? What will the new rates be like, if the couple/newly divorced individuals can even get a loan in the first place? How do you put an exact cost on the credit/emotional fallout/spillover that affects everything else in their lives - in real terms or otherwise?

These are ALL (easily possible) tangible expenses from a life-changing event such as a child's passing.

Oh, but the couple should just hurry up and rush a service to get the kid in the ground and return back to work before losing their jobs. All you need for that is a couple grand in coverage - anything more is merely looking to 'cash in'!




What is the the point being made here?

Of course a lifetime of child expenses will cost more than a single funeral service.

Are you implying the costs that are avoided after passing are in effect 'recovered' because they never have to be paid for as the child ages in the first place? Thusly, even after the expenses of a burial are figured in, losing a child is in actuality a net-profit event (talk about 'cashing in'!)? I'd say that's rather cynical, to say the least...

That scenario, strictly financially speaking, is completely discounting the above-mentioned expenses that are a real possibility to incur secondary to losing a child, which can meet or exceed child-rearing expenses.




Lastly, you are neither an agent nor do you understand how expansive the definition/costs of a loss (of a child - of other losses as well?) (nor do you even have children or a spouse of your own to even comprehend what you could be facing in their absence...) is/are, so what are you doing on this forum, in this thread, 'arguing' your POV - which is grossly underdeveloped, misinformed, and unqualified for the discussion at hand??

What a great post. well said!

 

[mikeincolumbuso]

Lots of good stuff here. I have seen cases where the parents took out small policies on the kids that were paid up by the time they became adults and there was the peace of mind knowing they had all of the benefits that a paid up policy offers. I have also seen situations where the child grows up, runs see the CV of the policy and cashes the policy in to pay some bills, which is not what the policy was intended to do. That is really my biggest drawback to life insurance on children. What do other agents think?

 

[blue_wynd]

Lots of good stuff here. I have seen cases where the parents took out small policies on the kids that were paid up by the time they became adults and there was the peace of mind knowing they had all of the benefits that a paid up policy offers. I have also seen situations where the child grows up, runs see the CV of the policy and cashes the policy in to pay some bills, which is not what the policy was intended to do. That is really my biggest drawback to life insurance on children. What do other agents think?

Don't assign the ownership of the policy over until the child has family of their own; by which time they should see the value of the policy their parents have paid up for them.

 

[jsbarber12]

I wrote this last night in another section, though to post it here too.

I would do a 10 pay whole life. It is guaranteed to be pay off in 10 years by the insurance company. The scenario is 10 pay age 5 M. So if it is 2500 it will be 25,000 by the time you are done. Once you are done, you can stow and forget it. Why buy it for someone so young and for 250k? Let's go over some simple ideas....

Basic info on the policy:

1. The policy is permanent.

2. While it is being paid off and afterwards; the cash value is guaranteed to increase to eventually reach the 250k and if dividends (NOT guaranteed, so try find a company with a history of paying them) are paid by the life company, the cash values increase faster and if you use the dividends, in simple terms, to "buy more insurance", the 250k policy could be 260k in year 5, 290k in year 10, etc. As the policy face amount grows, you also get more dividend amounts too, so sort of like a compound effect on the dividends if you will.

Reasons:

1. Using your figure, for a maximum of 25,000 over 10 years (2,500x10) if your child god forbid, has an accident, you can get a min. 250k benefit for the normal funeral expense. More importantly you get time, time to grief. How long do you think you will need? Your husband? I think I can say for parents everywhere, myself included, months or even years are needed.
Can you do your job as you grief? Wouldn't you like an option of taking a complete break from your work and using the life insurance benefit to pay the bills as you pull yourself together? What does that money mean for your marriage stress wise? Having financial problems on top of losing a child can only add more stress to an already tense time in any marriage. The extra money can mean pulling it through or a divorce. Calculate it, find the ballpark amount for your job. The scenario 250k might be more or might be less than you need.

2. The second reason for the 250k amount is to build up cash value. Having a higher face amount and paying that policy off in 10 years vs. to age 100 means one can grow your cash value faster. So your son is off to college, you can choose to tap into that cash value if necessary. I personally would do it as a loan, as I still want to keep the policy not surrender it. Yes, there will be interest to be pay on the loan and one of the option is using the dividends from the company, if any, to pay that interest. So you might not even have to pay anything out of pocket. After 18 years and at 250k, it can be a nice little amount if dividends are pay.

3. Now your son is married and have children of his own. You tell him, I brought this policy a while ago, it has served me well over the years and now it is yours. This policy has been in force for a while now, and if dividends has been given by the life insurance company, it is now much more than the initial 250k policy. So you transfer the ownership of the paid up policy over and your son will list his wife and children as the beneficiaries. Now your grandchildren has something in place if your son is called before his time. Your son can choose to get additional insurance to cover his family, or not, but at the very least he has something.

So why buy a life insurance on a child? Because it can serve 3 generations. The reasons above is the basic idea for why I brought it for each of my two kids and why I would recommend new parents to get. The idea, for me is sound. It can be done at 25k or 250k. I think if possible, a bigger amount best ulitilize it.

That was the first post i have ever read that truly sold me on a product

 

[blue_wynd]

That was the first post i have ever read that truly sold me on a product

Thanks, hit me up if you want to buy one for your kids now. lol.

 

[jsbarber12]

Ironically bought one this morning ha 50k for $20.29mnth WL
- - - - - - - - - - - - - - - - - -
Side note I'm a p&c guy so I know verrrrrry little of life products

 

[blue_wynd]

Ironically bought one this morning ha 50k for $20.29mnth WL
- - - - - - - - - - - - - - - - - -
Side note I'm a p&c guy so I know verrrrrry little of life products

You know there is a free look period right? lol. Just curious here, which company you got the whole life from?