Whole life policy for a two year old ?

[Cedrus]

Oregon.

Tried a search and found zilch. Maybe I did not do it right.

We received in the mail a solicitation from Globe Insurance Co. for a whole life policy geared for children. Guess they found out we have a 2 year old grandson.

$7.99 a month for $25,000 face amount. "The rate is based on your children's present age and is guaranteed to stay the same for the rest of their lives"

I don't know anything about whole life and did not call Globe yet. Don't have the actual policy/contract yet.

Is this worth looking into or do I have to make payments for 99 years before Gchild gets the $25K ? Or is it more likely that 20 years of premiums will get me/Gchild about $2500.00 ?

 

[moburkes]

Oregon.

Tried a search and found zilch. Maybe I did not do it right.

We received in the mail a solicitation from Globe Insurance Co. for a whole life policy geared for children. Guess they found out we have a 2 year old grandson.

$7.99 a month for $25,000 face amount. "The rate is based on your children's present age and is guaranteed to stay the same for the rest of their lives"

I don't know anything about whole life and did not call Globe yet. Don't have the actual policy/contract yet.

Is this worth looking into or do I have to make payments for 99 years before Gchild gets the $25K ? Or is it more likely that 20 years of premiums will get me/Gchild about $2500.00 ?

You won't be here in 99 years to pay the policy. The premium is $7.99 per month, until the grandchild dies. This isn't a term policy.

 

[mmmagique]

The difference between whole life and term is that term is much less expensive, but only pays off when the person who is insured dies. Whole life builds up cash value which can be borrowed against by the insured, should they wish to do so.

If you do decide to buy insurance for your grandchild, (and at their age, I would recommend whole), please do yourself a favor and check out rates of other companies, and what their rating is.

 

[moburkes]

The difference between whole life and term is that term is much less expensive, but only pays off when the person who is insured dies. Whole life builds up cash value which can be borrowed against by the insured, should they wish to do so.

If you do decide to buy insurance for your grandchild, (and at their age, I would recommend whole), please do yourself a favor and check out rates of other companies, and what their rating is.

A minor correction. Term only pays off when the person who is insured dies DURING THE TERM PORIOD OF THE POLICY. So, you're taking a gamble (a good one, though) that the insured will due during the term, while the insurance company is gambling that the insured will live during the term - or let the policy lapse.

 

[Cedrus]

Thanks for the replies.

I am familiar with term life. Whole life, no. I guess if I ask to see the written policy it will take many, many years of $7.99 monthly payments to reach the $25,000 stated benefit for little Lorenzo to collect and use for college or a new Corvette.

My guess is there will be about $2500 available and in 20 years, that purchasing power will shrink it down to $1500 in 2028 dollars.

 

[seniorjudge]

Thanks for the replies.

I am familiar with term life. Whole life, no. I guess if I ask to see the written policy it will take many, many years of $7.99 monthly payments to reach the $25,000 stated benefit for little Lorenzo to collect and use for college or a new Corvette.

My guess is there will be about $2500 available and in 20 years, that purchasing power will shrink it down to $1500 in 2028 dollars.

I agree with what the insurance gurus have stated here.

Another thing you may want to consider is a policy which will allow the kid to buy more insurance later on.

We don't want to think about this, but the kid may become uninsurable later on in life.

 

[moburkes]

Don't buy whole life based on the money it accumulates (called cash value). Whole life is NOT an investment. If your sold purpose is to get $2500 back out of the policy is 20 years, put your money in a bank, or under the mattress, whichever seems like the best idea in today's economy.

 

[ecmst12]

If you want an investment that Lorenzo can use to buy a car in 20 years (or pay for college), there are many better choices then whole life.

 

[Nativity]

If you want to look into a Insurance plan look into Gerber Grow Up plan.

But like it was stated if you just want the money to accumulate once he has hit a certain age just go for simple savings bonds.

 

[Lass1]

Whole life for young uns

Buying whole life for children can be useful if there is guaranteed insurability/expandability built into the policy. We bought 25k policies for our children when they were small. Later one was diagnosed with a bleeding disorder which many individual insurers will not cover, however, he had guaranteed and expandable coverage, which he has taken advantage of to protect his new family in the event of his untimely death.

 

[momm2500]

whole life

i bought whole life $25,000 policies for both kids before they turned 1. well now oldest is 24 and is dying from a reoccurance of his cancer from 12 yrs ago. there is no way shape or form that anyone would insure him at this point......but because of all that money that has built up over the years, i had the option of no longer paying premiums when child turned 21 and the cash value plus the dividends would pay his premiums till whenever. or i just keep paying the little premium and now his $25,000 policy is worth $65,000.


i suggest you talk to a good company and get a couple of opinions till you make the final desicion on what you would like to do.