re: Thoughts on whole life policies for children?

Premium load is similar to a mutual fund sales charge. If one exists, it ranges from 5-8% of the premium paid off the top.

The surrender charge is an obvious expense. I agree it makes sense to wait for that to be zero, but investigate the other costs further.

Surrender charge wouldn't necessarily be my only concern.

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That monthly amount can also get you a half million dollar term policy on a 40 yr old smoker.

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I agree lol. The problem everyone is sold that $25, 30, 40 a month for x amount of insurance is not a lot. The problem in that logic though is that when you can buy a policy for $3 and the want to sell it to you for $30 that is expensive.

I understand. The policy I sold was a whole life that was paid up in 15 years. It also is a participating policy, meaning it pays dividends. At the end of 15 years, it continues to pay dividends as long as the insured is alive. It also included guaranteed insurability for 5 times the face amount with no underwriting. Options were $10000 or $20000 face amount.

This is what I would do, based on what I have done with my kids. First off, you don't need a life insurance policy for your kids. I wouldn't want to make money of their deaths and your "emergency fund" which you should already have [a few months salary in an easily accessible savings account] will handle funeral expenses.

[and for general insurance advice, every single financial advisor I have ever talked to said only ever buy TERM life insurance and not whole life]

So, if you have extra money each month, instead of spending it on a life insurance premium do one or both of these. First, put the money in the 529. I can't stress enough how happy you will be that this money is there when it is time for college. Also, it grows AND you get income tax benefits from your contribution. There's a max amount per child that you can donate in LA and deduct from your LA income tax and that is what we did each year.

Next, start a Schwab custodial account for each child. We did this and saved private high school tuition for each child when they were still young [elementary school is somewhat affordable -- it is high school, especially when you have more than one in high school at the same time -- that will kill you].

We saved enough in the 529 to pay for room and board at LSU [assuming TOPS was going to pay tuition, maybe not the case now].

We didn't allow ourselves to buy a nice house until we had four years of high school tuition in each child's custodial account. This sounds like a lot of saving and it was. One time, we even moved to a cheaper house that we bought with equity from our old house just so we could save the house payment for high school tuition instead.

Every time there was an end of the year bonus or extra money, we saved it in either of these two options [401 k was being funded through work]. Has worked out great for us. Good luck!