Posted by admin | Posted in Spyderco Ying Yang | Posted on 18-04-2011
Tags: gerber life insurance cash value, gerber whole life insurance cash value
What is whole life insurance?
i got something from gerber that said i can get a policy for my kids that builds cash value, and doubles at age 21, it says that well, if i did it now while they are babies, it would cost around 50 a month for a 35000 policy and that would be 70000 when they turn 21, do you know if that means that when they turn 21 they can take out the 70000 for college or a house or something, or whether it just means that if they die the 70000 would go to the beneficiary or both, i dont quite understand, it says that it builds cash value, but does that mean that it only builds the cash that you put into it? I really need to know because if they can have a nest egg of 70000 when they turn 21, it would be worth doing…
Whole life is a policy where rates are set, and stay that way forever.
If you want to insure your babies now, for the next 20 years, with a renewable & convertible clause, you can buy $150,000 for about $100 A YEAR. Whole life is the MOST expensive way to buy insurance.
$70,000 is the PAYOUT IF THEY DIE. Cash value is about 10% of what you pay into it. You have to BORROW the cash value, and pay the insurance company interest on it.
Do the math. If you put $50 a month into a mutual fund NOW, when they’re 21, they’ll have over $33,000 at a VERY modest 8%. Your “cash value” on a life insurance policy will be about $1500.
If these kids NEVER add a dime after they turn 21, by the time they retire, they’ll have $2,915,687.97. Again, at a VERY modest 10%. If you do the average, 12%, they’ll have over $7,000,000.
MUCH better investment than that gerber life policy.
