So, I just changed insurance agents (not companies, just agents) and had a pretty good review meeting. Overall, I'm happy with what the new agent is recommending - except for one thing.

Agents like to push while life insurance policies for kids. I had it pushed on me by the agent I had when my son was born, and now that I have a new agent, I'm getting the hard sell again.

Basically, the rationale is that you need this policy, not for its value, but to guarantee that your kid has access to life insurance when it's time for them to get their own policy. They really try to tug at emotions (vs logic) buy arguing "What if something happens that makes your child uninsurable?"

I hate whole life insurance. I don't have a policy for myself (i have term). And what they are offering for my kid is really expensive (by my standards).

But what I don't really know is - can someone become completely uninsurable? I feel like the answer to this is NO (although, I can imagine situations where the policies are very expensive).

My inclination is to take a hard pass (as I have before), but I thought I'd take the temperature here. This seems to be the one thing that agents get really worked up about - that as parents, we have some sort of moral obligation to ensure our kids have access to insurance (no matter how crappy it may be).

OP, it'll take a bit but this topic usually comes alive once several board resisdents catch wind of it.

As a side question, when you say it's super expensive what you were quoted for a kid, can you give those numbers. Just curious.

Tecolote said:

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OP, it'll take a bit but this topic usually comes alive once several board resisdents catch wind of it.

As a side question, when you say it's super expensive what you were quoted for a kid, can you give those numbers. Just curious.

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Yeah, I've seen while life discussed here before, but I don't remember every reading about this specific issue re "making sure" your kids have access to insurance.

Premium I was quoted was $66/month for 20 years on a $50k policy.

Mathematically it really just blends term life insurance with an investment portfolio, and I've neevr bought that there was any advantage in blending the two

TXTransplant said:

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Tecolote said:

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OP, it'll take a bit but this topic usually comes alive once several board resisdents catch wind of it.

As a side question, when you say it's super expensive what you were quoted for a kid, can you give those numbers. Just curious.

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Yeah, I've seen while life discussed here before, but I don't remember every reading about this specific issue re "making sure" your kids have access to insurance.

Premium I was quoted was $66/month for 20 years on a $50k policy.

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Numbers are a little higher than I've been quoted. As for discussion on insuring kids have access to life insurance I do remember it being discussed. Basically, if your kid comes down with childhood diabetes, heart defect, etc. it could prevent insurance availablity in the future. Lots of people can get automatic term through employer without any medical questions.

Anyway, I am not a financial advisor or sell insurance, etc. Comments above just what I've read and been told. The topic seems very binary - either absolutely no or strongly yes. Not much of "it depends."

Interested to see how this thread runs its course.

Tecolote said:

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TXTransplant said:

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Tecolote said:

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OP, it'll take a bit but this topic usually comes alive once several board resisdents catch wind of it.

As a side question, when you say it's super expensive what you were quoted for a kid, can you give those numbers. Just curious.

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Yeah, I've seen while life discussed here before, but I don't remember every reading about this specific issue re "making sure" your kids have access to insurance.

Premium I was quoted was $66/month for 20 years on a $50k policy.

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Numbers are a little higher than I've been quoted. As for discussion on insuring kids have access to life insurance I do remember it being discussed. Basically, if your kid comes down with childhood diabetes, heart defect, etc. it could prevent insurance availablity in the future. Lots of people can get automatic term through employer without any medical questions.

Anyway, I am not a financial advisor or sell insurance, etc. Comments above just what I've read and been told. The topic seems very binary - either absolutely no or strongly yes. Not much of "it depends."

Interested to see how this thread runs its course.

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That's my real question - can you really become uninsurable, or does it just mean you pay more? And I'm not convinced that it's my responsibility to make sure my kid has access to life insurance. If I were to make a list of all the things I have an "obligation" to do as a parent, this would not be on it - at least not at this cost.

TXTransplant said:

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Tecolote said:

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TXTransplant said:

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Tecolote said:

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OP, it'll take a bit but this topic usually comes alive once several board resisdents catch wind of it.

As a side question, when you say it's super expensive what you were quoted for a kid, can you give those numbers. Just curious.

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Yeah, I've seen while life discussed here before, but I don't remember every reading about this specific issue re "making sure" your kids have access to insurance.

Premium I was quoted was $66/month for 20 years on a $50k policy.

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Numbers are a little higher than I've been quoted. As for discussion on insuring kids have access to life insurance I do remember it being discussed. Basically, if your kid comes down with childhood diabetes, heart defect, etc. it could prevent insurance availablity in the future. Lots of people can get automatic term through employer without any medical questions.

Anyway, I am not a financial advisor or sell insurance, etc. Comments above just what I've read and been told. The topic seems very binary - either absolutely no or strongly yes. Not much of "it depends."

Interested to see how this thread runs its course.

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That's my real question - can you really become uninsurable, or does it just mean you pay more? And I'm not convinced that it's my responsibility to make sure my kid has access to life insurance. If I were to make a list of all the things I have an "obligation" to do as a parent, this would not be on it - at least not at this cost.

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I'm not an insurance agent or financial advisor, but my understanding is yes someone could become uninsurable. Now, someone may say that's not true, but if the premiums are astronomically high, that's the same as being uninsurable in my book.

As for cost, it may seem high now - I'm now talking generalities. In 15 years, that same monthly premium will seem much lower - like a mortgage payment seems less of a monthly impact in later years.

Again, I'm not advocating for or against these policies.

One of my good friends was a CFO for a very large national accounting firm and is currently a doctor

He recommended to me to get a whole life (not thru him as he no longer does this)

I never did, have term, but it did make me think

I have a whole life policy my parents bought when I was a kid. I'm not sure on the length but maybe 10 years? Anyhow it is 10,000 and basically covers funeral expenses.

My parents weren't poor when I was born, but more lower middle class. As I grew up incomes and savings rose. Now they could easily write a check to cover such costs as they are close to retirement.

I think it depends on the reason for needing the insurance. As to whether it is good for your purposes.

TXTransplant said:

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Tecolote said:

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OP, it'll take a bit but this topic usually comes alive once several board resisdents catch wind of it.

As a side question, when you say it's super expensive what you were quoted for a kid, can you give those numbers. Just curious.

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Yeah, I've seen while life discussed here before, but I don't remember every reading about this specific issue re "making sure" your kids have access to insurance.

Premium I was quoted was $66/month for 20 years on a $50k policy.

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That would be about 40k at 8% at the end of 20 years. Which you then could use for anything or it could endow a lifetime of life insurance premiums. Not advocating one way or another just something to consider.

Zemira said:

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I have a whole life policy my parents bought when I was a kid. I'm not sure on the length but maybe 10 years? Anyhow it is 10,000 and basically covers funeral expenses.

My parents weren't poor when I was born, but more lower middle class. As I grew up incomes and savings rose. Now they could easily write a check to cover such costs as they are close to retirement.

I think it depends on the reason for needing the insurance. As to whether it is good for your purposes.

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That's kind of my situation. I'm fortunate that I could cover just about any expense scenario myself that a $50k policy would cover. The only reason I even stopped to think about it is because of the "guaranteed insurability" thing. But I'm not even sure what that means because I don't know how much additional insurance he'd have access to or how much it would cost.

Never have looked into a kid policy and never would buy. Can't you add a cheap rider policy to your term policy? Or just grab a cheap term for the kid if you have to be able to cover end of life expenses?

10andBOUNCE said:

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Never have looked into a kid policy and never would buy. Can't you add a cheap rider policy to your term policy? Or just grab a cheap term for the kid if you have to be able to cover end of life expenses?

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I think the policy I have through my employer may cover that. But like I said, it's not the value of the coverage they are "selling" (because $50k really isn't all that much. It's this "guarantee" that he can buy a policy on his own in the future that they claim has so much "value".

Have a term policy for my kids through wife's work. Think we pay $10/year total for both and each policy is worth 15k if I recall. More than covers funeral expenses should the unthinkable happen for next to nil.

I have whole life policies my parents got when I was super little. They're pretty cheap and have a lot built up at this point so I keep up with them, but didn't make sense for our kids.

I have a policy for my son. I'm an ag pilot and term life insurance for us is insanely expensive, so I wanted him to have something in case he decides to follow in my footsteps.

I have a friend whose financial advisor recommended putting money in whole life policies for his sons instead of 529 accounts, something about not facing the penalties if the money ended up not being used for college. I have no clue if that's sound advice, never looked into it myself.

Meh...maybe a portion of it, but it's just not going to grow at the rate it needs too, especially in the kiddo's you get years, to touch the ridiculous price of college in 15-20 years.

For folks that are in the situation of not knowing if their kid's going to go to school, I recommend some portion of their alloted "college savings" to go into a UTMA/UGMA account. Even though it doesn't have the tax treatment of a 529, you can still allocate it to grow just like a 529.

CenterHillAg said:

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I have a policy for my son. I'm an ag pilot and term life insurance for us is insanely expensive, so I wanted him to have something in case he decides to follow in my footsteps.

I have a friend whose financial advisor recommended putting money in whole life policies for his sons instead of 529 accounts, something about not facing the penalties if the money ended up not being used for college. I have no clue if that's sound advice, never looked into it myself.

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This sounds like why many people are bashing the whole life for kids.

I bought my kids policies provide the option of ensuring my kids insurability and to also have final expenses is the tragic event that we needed it
There are better option for kids education plans. Ie 529, Roth IRAs, backdoor roths, even UGMAs,

b0ridi said:

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Life insurance for kids. What will the salesmen think of next?

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insurance for dogs

TXTransplant said:

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But what I don't really know is - can someone become completely uninsurable? I feel like the answer to this is NO (although, I can imagine situations where the policies are very expensive).

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Yes, people do become uninsurable. Rare, but happens.

Term rates are cheap for those that are healthy. Those that have health issues will pay more, could be double or triple the rate.


Not unusual to see people get a 20 year term product at "Preferred Best" rates while healthy and in their 20's & 30's, then they want to get coverage for a while longer in their late 40's & beyond and aren't quite as healthy. Rates will then shock them.

DadAG10 said:

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TXTransplant said:

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But what I don't really know is - can someone become completely uninsurable? I feel like the answer to this is NO (although, I can imagine situations where the policies are very expensive).

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Yes, people do become uninsurable. Rare, but happens.

Term rates are cheap for those that are healthy. Those that have health issues will pay more, could be double or triple the rate.


Not unusual to see people get a 20 year term product at "Preferred Best" rates while healthy and in their 20's & 30's, then they want to get coverage for a while longer in their late 40's & beyond and aren't quite as healthy. Rates will then shock them.

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So, does anyone have examples of conditions that would make someone uninsurable?

I can easily think of things that would just make insurance more expensive, but I'm curious what would prevent someone from being able to get insurance at all.

Forms of cancer could definitely be one of those, maybe some seizure disorders, HIV perhaps...terminal things or one that could make you extremely risky in terms of covering you.

I've never been a proponent of whole life, but was always told it would make sense for estate planning. Well, a mentor of mine who fits in the "make sense" category purchased 5 million dollar policies for he and his wife in the 1980's.

These were prepaid policies. Well, guess what, they have already come back three different times to tell him that their projections were wrong and he needs to pay more money.

So, it might not be only $66 a month. They could come back for more making projections even worse.

$75,000 on a 10 year old is about $15 a month. If you want your kid insured and can afford it then get it. If you don't care then don't get it. Not that hard of a decision.

BO297 said:

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I've never been a proponent of whole life, but was always told it would make sense for estate planning. Well, a mentor of mine who fits in the "make sense" category purchased 5 million dollar policies for he and his wife in the 1980's.

These were prepaid policies. Well, guess what, they have already come back three different times to tell him that their projections were wrong and he needs to pay more money.

So, it might not be only $66 a month. They could come back for more making projections even worse.

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I can assure you they weren't whole life policies. They may have been 'permanent insurance' and I can almost guarantee you they were universal life; interest rates at the time were in the teens and there is no way they met projections as rates dropped. Couple that with 'they were bought in the 80's' and I can all but assure that's what happened. These are reasons I don't bother with UL or VUL in my planning...I get in debates with wholesalers all the time but barring very certain circumstances, I steer clear of UL and all its types. Universal life and whole life are completely different.

So much of the confusion could be avoided if people understood what they really have.

To the OP...the problem is not the tool (whole life). The problem is the way you're trying to use it. Your contributions aren't high enough to make it worth it, IMO, and the cash breakeven happens way too far down the road. Plus, the idea of being to buy add'l insurance is a good one but the thing to remember is they can only do it a finite amount of times for specific amounts. At 66/mo, I'm guess your DB is 25k or lower, meaning they'd be able to buy it in 25k increments. Again...the contribution probably isn't high enough. But the strategy can work.

Example: If someone had 200/mo to contribute, 150 to a 529 in a low cost equity heavy portfolio that stays equity heavy (not age based) and 50 to a whole life portfolio paid up in 20 years can make a lot of sense with the whole life serving as a bond proxy and market hedge. You can't compare whole life to the market because it doesn't take the risk the market takes and consequently, doesn't give the same return. But it does better than bonds and a helluva lot better than cash.

The people saying they're doing it for the commission may be right, but it's a pretty terrible strategy that would pay me all of 183 bucks to implement (if you want a glimpse behind the curtain).

Take time to learn what it is, what it isn't and then think about how you could use it.

FrioAg 00 said:

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Mathematically it really just blends term life insurance with an investment portfolio, and I've neevr bought that there was any advantage in blending the two

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Wasn't there a big advantage to this back in the day.

And by back in the day, I mean. Back before low cost etf mutual fnds and when we had significantly higher individual tax rates.

Duncan Idaho said:

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FrioAg 00 said:

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Mathematically it really just blends term life insurance with an investment portfolio, and I've neevr bought that there was any advantage in blending the two

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Wasn't there a big advantage to this back in the day.

And by back in the day, I mean. Back before low cost etf mutual fnds and when we had significantly higher individual tax rates.

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Term blended with an investment portfolio is the definition of universal life...that's not how whole life works. UL is a yearly renewable term coupled with a separate cash reserve with tax benefits. The problem is that not only are you hoping that the market cooperates or that interest rate projections hold true; you also have a monthly deduction for the cost of insurance (which is going up every year because you're getting older) as well as other policy 'fees'.

Similar low cost options are available in the UL platform (our S&P 500 costs 20 bps). You can still do it with tax advantages. But the other expenses are going to eat at its growth. The argument vs a taxable account is that either the govt gets it in the form of taxes annually or you can buy insurance with it and get it tax free. But when the alternative is already tax free like a 529, it's a lot harder to justify a market based product.

That's the argument though...I disagree with it, but it's their argument. I've replaced too many of those trash policies for people that have had them a while to feel differently.

But all of that is not describing whole life.

Quote:

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To the OP...the problem is not the tool (whole life). The problem is the way you're trying to use it. Your contributions aren't high enough to make it worth it, IMO, and the cash breakeven happens way too far down the road. Plus, the idea of being to buy add'l insurance is a good one but the thing to remember is they can only do it a finite amount of times for specific amounts. At 66/mo, I'm guess your DB is 25k or lower, meaning they'd be able to buy it in 25k increments. Again...the contribution probably isn't high enough. But the strategy can work.

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This is exactly the kind of answer I was looking for. To posters who think this decision is easy to make as long as I can 1) afford $66/month and 2) want my kid insured, that is NOT at all what I was asking. The answer to #1 is yes, but the answer to #2 is no, if I just consider the cash value of the policy that I would be purchasing.

I don't need $50k in life insurance on my son. And, honestly, once he is old enough to take over the policy himself, I don't think a $50k policy (that costs you over $15k in premiums) really has all that much value (if you die and leave behind a family to support, $50k is peanuts).

If he ever has a family of his own, I'd advise him to do what I did - which is purchase a term policy.

The parts I was not clear on were 1) is it possible for him to become completely uninsurable (my thought was, even if he was diagnosed with something, he could still get a term policy, it would just cost more); and 2) if he did become uninsurable and has to rely on this policy, how much more coverage could he add, and at what cost?

If your numbers are correct and he would only be able to but more insurance in $25k increments, then to me the policy is still useless. This is being sold to me as something that I have an obligation to purchase for my kid so that, if he ever becomes uninsurable, he can still buy insurance on his own to provide for HIS kids.

IMO, any policy that pays out less than $100k isn't worth the time and trouble. Using this policy as the start, I can't see a path that would get him to that kind of coverage very easily. I guess $100k of coverage is better than no coverage at all, but it's not enough, if you're buying it to support a family. And if adding more coverage to this policy is going to be expensive, he might as well just take that money and apply it to a term policy that has a higher payout*.

*This is assuming that he does not become completely uninsurable. Buying insurance involves an assessment of risk, and I think the risk of him becoming completely uninsurable is pretty low. He has a higher risk of ending up in a situation where he can get insurance, but it's just very expensive - at which point I would help him out.

Becoming uninsurable isn't likely but it's definitely not unheard of. My sister has been uninsurable since age 4.... Type 1 diabetes is pretty much uninsurable (I've run it through more than forty carriers in the past year with no takers). Some cancer diagnoses are permanent declines, although most are flat declines for a period of time (usually 7-10 years) and then elevated premiums.


I checked the prices for one of the main carriers we use: a 75K policy for a 5 year old boy would run about $40/month. The death benefit grows over time and the premiums are locked in. After age 20 the insured has 7 options to buy double the original face amount (so in this scenario 150K per option). If they exercised all options, they could have a little over a $1M of coverage at age 40, not counting the original policy.


IMO, child policies are a bit of a luxury. If you're concerned about insurability because of family history, personal experiences, etc. and you have an extra chunk of money each month not earmarked for anything, then consider them. Most of the time though those dollars should be used for other more pressing goals. But worse case scenario, depending on the ROR of the cash value, if the kid wakes up at 25 years old with no health issues, you cash the policy out and get your premiums back. On the flip side, if there were some unforeseen health issues that popped up and caused some problems it's a small enough amount of money that most people would be glad that they purchased it.



Man these threads are hilarious. So much misinformation comes flying in from the cheap seats. And I'm betting investorag's breakdown of UL not being WL sent some people into cross eyed confusion.