Life insurance for babies?

[GXA]

I agree with the comments above.  I would not buy/recommend a life insurance policy for a child if the parents can afford to bury the child.  Unfortunately some family dynamics make this "No" a little more difficult.

[VagabondMD]

Pass.

I made the early mistake of buying insurance from my father-in-law, variable universal life, before I knew better. Even in retrospect, it would be hard to turn away the well-intentioned man, but I might invoke the "rule" that I do not mix business with family.

[The White Coat Investor]

The White Coat Investor wrote:

DMFA wrote:

My mother-in-law who sells insurance tells me that our healthy 15 month-old son should have a life insurance policy.

Is this just a case of someone who sells a product trying to sell a product, or is this commonly done?  I’d be a lot more inclined to believe her if she hadn’t tried to sell us a whole life policy…and getting a term policy on a healthy toddler has an extremely low likelihood of being needed.  I know I’d get more for him by putting the money elsewhere.

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No no no. Don’t buy insurance from people who don’t recognize what insurance is for. Don’t buy insurance from family members. Don’t buy insurance from people who push whole life.

I mean, if you can’t afford to bury him, sure, buy a $10K policy. But for most of us, if our kids died our need for income would go down. I wish I could get someone to submit a guest post advocating insurance for kids. That would be a very easy Pro/Con to do!

If you want to put money away for your kid, I’d do one of the following:

1) Roth IRA for earned income for their retirement

2) 529 for college money you want to maintain control over

3) UGMA/UTMA for money you want them to have at 18/21 for whatever they want but that you want out of your estate and want to take advantage of their lower tax rates with.

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Ha ha. I went to go write a post on this and realized I already did! It runs in January.

[Craigy]

Johanna said it best in the first reply.  If your mother in law thinks it's that important, she should buy the policy herself!

Best strategy for you is to avoid the topic as best as you can.

[The White Coat Investor]

LBKCLU wrote:

I don’t agree with it, but it is a reason and wanted to bring it up nonetheless to give him a reason as to why his Mother-In-Law might be pushing for it. I don’t have life insurance on my kids and I’m an agent. Using Guardian as an example, they can’t even qualify for the best underwriting classification until age 18 on Whole Life and can’t buy term until age 20.

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That's interesting. You can't even buy term as a kid. Cause it could make sense to buy a 30 year level term or an ART on a 10 year old or something to preserve insurability.

[DMFA]

eaglecap wrote:

My last line of needing a husbands of PMG was meant as a joke.  I am too busy trying to get my wife off of PMG so we can go out and do something more productive

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Well... https://www.facebook.com/groups/dadsmarriedtodoctors/ it exists.

You mean you don't want to use a bunch of Dagne Dovers and Insta-pots as an insurance policy?

Thanks for all the input, folks.  I really appreciate it.

[LBKCLU]

I don't agree with it, but it is a reason and wanted to bring it up nonetheless to give him a reason as to why his Mother-In-Law might be pushing for it. I don't have life insurance on my kids and I'm an agent. Using Guardian as an example, they can't even qualify for the best underwriting classification until age 18 on Whole Life and can't buy term until age 20.

[The White Coat Investor]

LBKCLU wrote:

I would definitely take a pass.

Your son relies on you and not the other way around.

Unless you are concerned about a future insurability issue, your money is better spent elsewhere.

Even that issue is nonsense. I mean, what is the need for insurance among a 30 year old? $500K? $1M? $3M? Even a $100K policy  bought at a 1 year old is totally inadequate. Now, if you could buy some policy with a huge future purchase option or something, I could understand how some people might want to lock in future insurability. But not this.

[Josh0731]

uptoolate wrote:

This is the insurance companies’ ‘Friends & Family’ business model isn’t it?  Just say NO!! Diplomatically of course.  And I wouldn’t suggest that the MIL buy a policy – I would suggest a 529 as per WCI.

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It's like Herbalife for insurance!

[eaglecap]

My last line of needing a husbands of PMG was meant as a joke.  I am too busy trying to get my wife off of PMG so we can go out and do something more productive

[ZB60]

I am currently in my second year of med school, and we do have a 10k policy on our 18 month old son. If something were to ever happen to him, having everything paid for would be one less thing we had to worry about around that time. Of course still being a student, and only one modest income, it makes more sense for us than most readers here. This will change. Plus, it is only ~25 dollars per year. Roughly 1 dollar per pay period if I recall correctly.

[conniebird]

MrsIMDoc wrote:

DMFA wrote:

I mean, these are all the reasons why I said it wouldn’t be a good idea. I think my wife just bought into the difficulty of having to say no to her mom (who is innocently biased and thinks she’s doing the right thing) and some PMG kool-aid from some women who had an extremely unlikely catastrophe occur (like leukemia, and now is p much uninsurable). I think my MIL actually *did* get a whole life on him for like $100,000.

I showed my wife this article from Forbes so that she wouldn’t think it was just me being my money-grubbing self: http://www.forbes.com/sites/barbaramarquand/2016/01/27/the-hows-and-whys-of-life-insurance-for-children/

But yes Jim/WCI, I agree, that’d be an excellent first article.

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I love PMG (Facebook Physician Mom Group) and I also am on the PMG finance page, which I think was started by one of our frequent posters here who is awesome. I love both groups however my husband thinks I spend too much time on both.

That being said, I prefer to give financial advice on PMG rather than receive it.  Most of the people on both groups represent typical physicians with finances that are not “enlightened” by the WCI mindset. If I want financial advice or insurance advice I will post to WCI forum any day.

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Totally agree...I cringe at some of the advice given on the PMG finance group and any financial advice on the main PMG group.

[DMFA]

Apparently the doctor dads who are married to doctors and the non-doctor dads who are married to doctors don't seem to get along. I admit that's a second-hand observation from friends that are in it, but that's why I'm not in that group. I don't approve of that sort of vitriol.

[conniebird]

DMFA wrote:

We’ve got PDG, but it’s mostly dirty humor. There’s also Dads Married to Doctors, but there’s a lot of resentment toward doctors in there.

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Resentment towards their doctor wife???? Do tell.

[DMFA]

We've got PDG, but it's mostly dirty humor. There's also Dads Married to Doctors, but there's a lot of resentment toward doctors in there.