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| Blueberry |
 Posted: Sun Feb 20, 2005 3:36 pm Post subject: Life Insurance for grandchildren?? |
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Investing Associate
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| Even though our children are full grown and have children of their own, we still carry policies on our kids and our grandkids, just in case. With the cost of funerals and burials we thought this a good practice in case of financial need for expenses. Our policies are all very small, around $12.000 for each person, which would be enough to bury them or help cover other expenses. Is this a good investment?? |
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| eyesandearsjami |
| Posted: Mon Feb 21, 2005 1:43 pm Post subject: |
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Member Of The Month! February
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As an investment advisor and insurance agent I generally advise against life insurance on children and grandchildren. First of all, although this is a little sad, you are better off financially if something were to happen to minor children or grandchildren. Think about it, a child costs money to clothe, feed and educate not counting any spending money you give. The average cost for a basic funeral is around 5K. In any given year you would spend more, or at least 5k on your children.
Secondly, insurance is not an investment product. It is a product meant to substitute the income that would be missing to a family if an income earner was to pass away. There are far better things to invest in, real estate, mutual funds, stocks bonds and etc. than insurance.
My advice would be to see if there is any cash value in the policy (unless it is a term policy in which case there is no cash value). If it is I would surrender it (if there were no charges) and take the cash and no longer fund the insurance. Instead invest it into a mutual fund for your children and a 529 education savings plan for your grandchildren.
I hope this helps.
Jami |
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| fladoozle84 |
| Posted: Mon Feb 21, 2005 5:17 pm Post subject: |
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Investing Sr. Associate
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| Thats what my Great-Uncle did... put a small amount of money aside for my college education (lucky me!) It really came in handy |
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| eagertolearn |
| Posted: Wed Feb 23, 2005 12:08 pm Post subject: |
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Investing Sr. Associate
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| The only exception to it being a good idea or not is if there were medical issues that would make it difficult or impossible for your children or grandchildren to obtain life insurance later on in life. By having a policy on them now, they have the option of keeping that policy further on down the road - regardless of their health. |
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| trixiezzz |
| Posted: Wed Feb 23, 2005 7:02 pm Post subject: |
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Investing Manager
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| I've always heard that life insurance is for bread winners: those who have people depending on them for support. So big policies would be out unless your grandchildren are child stars whose income keeps the whole family afloat. However, if it's just to cover burial expenses, maybe it's ok, although the rates are low because the likelihood of that happening is very low. |
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