Is a Whole Life policy for children with a disabled parent a good idea?

[Anonymous]

Everything I've read or heard has said that whole life is a bad idea but my spouse has epilepsy and is uninsurable. They don't know the cause of it and there's no way to determine if our children will have it. A whole life policy on a baby is relatively cheap and will guarantee they can be insured when they are an adult even if they are also disabled. Is this a good idea or is it still a bad deal?

[Anonymous]

No. Invest the money in a 529 plan.

[Anonymous]

U can buy a child rider for your kids when u buy life insurance. The rider allows the kid to convert to permanent insurance. It is pretty cheap - usually covers all your children for one price.

[Anonymous]

The problem is that there will likely come a time when one can no longer pay for the policy, especially if the child becomes an adult who cannot work. At that point all the money is lost.

[Anonymous]

Anonymous wrote:No. Invest the money in a 529 plan.

It would be $280 a year for 15 years then the policy is in place for life with no additional payments ever.

[Anonymous]

Anonymous wrote:The problem is that there will likely come a time when one can no longer pay for the policy, especially if the child becomes an adult who cannot work. At that point all the money is lost.

It’s a 15 pay life policy.

[Anonymous]

Anonymous wrote:

Anonymous wrote:No. Invest the money in a 529 plan.

It would be $280 a year for 15 years then the policy is in place for life with no additional payments ever.

How do you know that this child eventually needs life insurance? How do you know how much is needed?

Bad idea.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:No. Invest the money in a 529 plan.

It would be $280 a year for 15 years then the policy is in place for life with no additional payments ever.

How do you know that this child eventually needs life insurance? How do you know how much is needed?

Bad idea.

If my spouse dies I’m screwed. I’m sure the same will be true for my kids.

[Anonymous]

What is the coverage on the plan? If it's a $1M policy for life--then sure, not a bad investment, assuming the company is likely to be around long-term. But if it's only $200-$300K (as I suspect it is) you are better off investing that money.

You'll pay ~$50K over the life of the policy. At a relatively conservative 5% yield, that would give you $200K+ after 30 years. With more aggressive investments, you might have closer to $1M in that same time period. And if the child lives a normal life to, say, 70, it would grow far more.

It isn't so much about whether the child will need life insurance, but about whether this investment is a reasonable way to get that financial security.

[Anonymous]

Anonymous wrote:

Anonymous wrote:No. Invest the money in a 529 plan.

It would be $280 a year for 15 years then the policy is in place for life with no additional payments ever.

What is the policy pay-out?

[Anonymous]

Anonymous wrote:What is the coverage on the plan? If it's a $1M policy for life--then sure, not a bad investment, assuming the company is likely to be around long-term. But if it's only $200-$300K (as I suspect it is) you are better off investing that money.

You'll pay ~$50K over the life of the policy. At a relatively conservative 5% yield, that would give you $200K+ after 30 years. With more aggressive investments, you might have closer to $1M in that same time period. And if the child lives a normal life to, say, 70, it would grow far more.

It isn't so much about whether the child will need life insurance, but about whether this investment is a reasonable way to get that financial security.

Whoops, I misread the premium as $280 a month. So $280 a year is only $4200. How much is the policy for? Is the company a longstanding insurance firm? That's a very low rate for a limited pay policy, so those two pieces of information are important. It might be a reasonable investment if the company is reputable and the payout is at least $100K.

[Anonymous]

Anonymous wrote:

Anonymous wrote:What is the coverage on the plan? If it's a $1M policy for life--then sure, not a bad investment, assuming the company is likely to be around long-term. But if it's only $200-$300K (as I suspect it is) you are better off investing that money.

You'll pay ~$50K over the life of the policy. At a relatively conservative 5% yield, that would give you $200K+ after 30 years. With more aggressive investments, you might have closer to $1M in that same time period. And if the child lives a normal life to, say, 70, it would grow far more.

It isn't so much about whether the child will need life insurance, but about whether this investment is a reasonable way to get that financial security.

Whoops, I misread the premium as $280 a month. So $280 a year is only $4200. How much is the policy for? Is the company a longstanding insurance firm? That's a very low rate for a limited pay policy, so those two pieces of information are important. It might be a reasonable investment if the company is reputable and the payout is at least $100K.

The payout is 25k. It’s a long term reputable company. It guarantees them the ability to buy more insurance without an exam when they’re older. So really I’d be buying a policy with minimal coverage to make sure they can have more insurance coverage when tbey have their own children...even if they have seizures as well.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:What is the coverage on the plan? If it's a $1M policy for life--then sure, not a bad investment, assuming the company is likely to be around long-term. But if it's only $200-$300K (as I suspect it is) you are better off investing that money.

You'll pay ~$50K over the life of the policy. At a relatively conservative 5% yield, that would give you $200K+ after 30 years. With more aggressive investments, you might have closer to $1M in that same time period. And if the child lives a normal life to, say, 70, it would grow far more.

It isn't so much about whether the child will need life insurance, but about whether this investment is a reasonable way to get that financial security.

Whoops, I misread the premium as $280 a month. So $280 a year is only $4200. How much is the policy for? Is the company a longstanding insurance firm? That's a very low rate for a limited pay policy, so those two pieces of information are important. It might be a reasonable investment if the company is reputable and the payout is at least $100K.

The payout is 25k. It’s a long term reputable company. It guarantees them the ability to buy more insurance without an exam when they’re older. So really I’d be buying a policy with minimal coverage to make sure they can have more insurance coverage when tbey have their own children...even if they have seizures as well.

Hmm, the guarantee to expand it is interesting. I'd ask more questions about that and be sure it really covers a scenario with pre-existing medical conditions. If so, it might be worth it (as long as you're clear, as you seem to be, that you are not buying an insurance policy, but an option for a future insurance policy). From an investment perspective, $4200 over 15 years for a $25K payout is not a good plan, but that's not the entire story here.

[Anonymous]

Long term, its not that much money and you are better off investing the money. My husband did one and we ended up cashing them out to give to the kids for college and it was no very much to cash out. Very bad investment.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:No. Invest the money in a 529 plan.

It would be $280 a year for 15 years then the policy is in place for life with no additional payments ever.

How do you know that this child eventually needs life insurance? How do you know how much is needed?

Bad idea.

If my spouse dies I’m screwed. I’m sure the same will be true for my kids.

Why are you sure of this? It's an odd thing to be sure of. You seem to be leaping to a bunch of conclusions here.

Whole life is a crap product. Avoid.