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Opinions on life insurance for your kids?
Posted on 1/28/15 at 10:48 am
Posted on 1/28/15 at 10:48 am
Considering getting a small policy on each of my kids. My agent mentioned a plan that's whole life, but you only pay a premium on it for 20 years and then the policy is locked in. It's only 35K in coverage, but I think the premiums are only 20-30 bucks a month. I believe the policy would have a small cash value as well. Is something like this a good idea to at least guarantee insurability on your kid?
This post was edited on 1/28/15 at 11:07 am
5
Posted on 1/28/15 at 10:56 am to Glock17
I wouldn't think it makes much sense and I'm not sure how it really does this either, outside of the 35k in coverage you're getting:
quote:
guarantee insurability on your kid
Posted on 1/28/15 at 11:03 am to Glock17
This thread is going to get shite on with the quickness. If you're doing it for the insurability aspect, make sure it has a guaranteed insurability rider that will allow them to purchase later in life with no evidence of insurability.
Not a fan of smaller policies on kids in general. Although when you're working with ideas like grandparent gifting and larger premiums, those policies if designed correctly can provide great benefits.
Posted on 1/28/15 at 11:10 am to Glock17
ALL my kids have a 15k term policy as a rider on my term policy for like 42 bucks a year combined. Like a dollar and change a month per child. I'll save for them on my own, and don't need a life insurance company to do that.
Posted on 1/28/15 at 11:47 am to Glock17
virtually ALL whole life policies are terrible 'investments' and only useful in VERY special circumstances. Children certainly don't need life insurance and you're just throwing away money that could turn into something substantial if saved instead.
Alternatively, put $25 per child in a full market ETF like VTI (call discount broker like Fidelity to find out which one) in a UTMA account or 529 if for college and here's what happens:
$24/month at
8% return
becomes
$15,000 in 20 years or
$37,000 in 30 years or
$445,000 in 60 years or
$992,000 in 70 years
good luck
Alternatively, put $25 per child in a full market ETF like VTI (call discount broker like Fidelity to find out which one) in a UTMA account or 529 if for college and here's what happens:
$24/month at
8% return
becomes
$15,000 in 20 years or
$37,000 in 30 years or
$445,000 in 60 years or
$992,000 in 70 years
good luck
Posted on 1/28/15 at 12:22 pm to Glock17
About a year ago, I was discussing some things with my mom - she is single, doesn't have a lot of savings, has a paid off house, and will probably work until she drops. We did some POAs and stuff like that in case we need it down the road. She told me that my grandparents (now deceased) bought a life insurance policy for her when she was like 6 months old. There hasn't been a premium payment due in 30 years, she gets an annual statement. The death benefit is something like $17,000 and grows a bit each year. Not much, but enough to go towards final cost. She has group life through work but is probably uninsurable (at least at reasonable cost) with a private policy.
My wife and I both have riders on our group term policies at work for our two kids... I think mine is for 20K term per kid and hers is 10K term per kid... combined... we might pay a total of $5 per month.
About a year and a half ago, we started putting $50/month in a savings account at the local credit union for each kid, in addition, we put half of any monetary gifts they receive into that account (they can spend the other half). Obviously that's not going to be a lot of money by the time they turn 18. We've also thought about buying a couple of small life insurance polices for them as well.
My wife and I both have riders on our group term policies at work for our two kids... I think mine is for 20K term per kid and hers is 10K term per kid... combined... we might pay a total of $5 per month.
About a year and a half ago, we started putting $50/month in a savings account at the local credit union for each kid, in addition, we put half of any monetary gifts they receive into that account (they can spend the other half). Obviously that's not going to be a lot of money by the time they turn 18. We've also thought about buying a couple of small life insurance polices for them as well.
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