“But if you carefully consider your purchase before making it and never cancel it you will always come out ahead. After all, everyone dies.”

You can call it “scare tactics”, or you can call it “more things to think about before making a decision”. I tend to filter everything I hear from salespeople through that filter, and rebut the things that don’t fit for me as I weigh all of the relevant factors in my decision.

Sure, insurance companies make money on you if you cancel the policy. But if you carefully consider your purchase before making it and never cancel it you will alwayscome out ahead. After all, everyone dies.

I wrote a post myself about why life insurance isn’t always a bad idea for kids, and I’m still glad I got my policy for my son.

This is a really good debate, and I appreciate the forum to give my 2 cents. Or 2 dollars.

I can relate to not wanting to work if something happen to your child and it may make financial sense if you ended up with a good policy. But for most cases, the insurance company wins 99.9% of the time.

Let’s be honest, insurance companies are not in the business of helping parents recover from emotional trauma. They are in the business of making money — and some even willing to exploit our emotional vulnerability to make a profit.

My x-husband is a life insurance agent and several times I have gone into homes to work with his clients. I have seen so many diffrent situations. A family I visited a couple of months ago had requested information on some of our policies ….. I called them and they didn’t have time that week for me to come out… the following week I set an appointment but they cancelled …. this happened about 4 times and then finally after a month and a half I went out to see them. During the time from the first call and my visit their 5 month old baby passed away during the night. They never thought it would happen to them … nobody does. Wouldn’t you rather be more safe then sorry???

I had another family who lost 3 of their 5 children within 4 short months….

I do not depend on income from my children but you better believe that I would not be returning to work right away if something ever happened to to them.

What would you do if one of your children passed??? scary idea but it happens everyday. Would you be able to return to work??? how about pay the house payment??? how are you going to pay any medical related costs??? Or what about care for any other children??? Money does not cure your pain but it does allow for you to cope a little bit better with the other situations going on around you…..

By the way how would the average family pay for a memorial??? The reality is not many could…. I am not saying buy life insurance on your children, and I don’t want people to think that I am saying to plan for the worst …. but maybe take a step back and answer some of the questions I stated to see how they would apply to you…

I agree that the Gerber plan isn’t a great plan. That said, I bought a life insurance policy on my son when he was born. I pay the policy for ten years and it’s paid up forever. I get a discount on the policy by paying it annually, so his $25000 policy will be paid for by the time he’s ten. It also has a guaranteed insurability rider, which ensures that he can exercise an option to purchase additional coverage at twelve different ages (plus once when he marries) at healthy rates even if he is uninsurable.

With his father being diabetic that was important to me. And it turns out he’s asthmatic. A double whammy. That’s the main reason I decided to buy it.

I don’t have the policy illustration in front of me, but you’re right that it’s not a terrific investment. But no matter what happens to him he’ll at least have this policy, and he’ll never have to put another penny in. When he’s older he can supplement it with term while he’s raising his family, but as term rates are astronomical later in life he can cancel those if he has to he, and he’ll still have this policy.

Additionally, if I ever do need to borrow money I can borrow form the policy, at it will still earn interest as if the money is still in the policy. So if it’s currently paying 6% and they charge 8% for the loan, the net cost to me is only 2%. Not a fantastic idea, but another option if I’m really in need of some cash quickly. And the interest is only taxable if I withdraw it from the policy (loans aren’t taxed).

So, life insurance should in my opinion never be an investment, per se. What you’re buying is peace of mind. Sure,there are ways to make more money. But I’ve got the peace of mind that he’ll be able to have life insurance when he needs it.

I never think of collecting on the policy – that wasn’t even thought about in reaching the decision. Really, G-d forbid a brazillion times.

There are as many different opinions on insurance as there are insurance agents. This policy and term were pretty much the only policies I sold (we also sold Universal Life and a few other specialty policies). It always made sense to me to have a small whole life with Guaranteed Insurability supplemented by term, though I’m sure many disagree.

Great topic! Thanks!