Gerber Life Insurance Video Review Gerber life is one of the most recognizable names in children’s life insurance because the company piggybacks off the popular baby food brand, Gerber. They offer a number of different products, with their most popular ones being the Gerber Life College Plan and The Grow-Up Plan. The Gerber Life College Plan provides life insurance protection for a parent, with a guaranteed payout when the child turns 18 years old. The marketing pitch is the adult gets to carry a life insurance policy while the child is young, and the insurance would pay out a predetermined amount when the child turns 18. But here is the thing: this plan is ridiculously expensive, and in many cases the “guaranteed payout” can be similar to the total amount of premiums paid over the entire life of the policy. In most scenarios, a parent would be better served by taking out a cheaper term life insurance policy for the same coverage amount, and investing the difference in premiums. The other option, called The Grow-Up Plan, is basically a whole life insurance policy for children. For the vast majority of people, whole life insurance is a grossly overpriced, and pitifully underperforming investment vehicle. This is no different when it comes to children’s coverage. Most children don’t need a life insurance policy in the first place. Life insurance is designed to help prevent financial disaster for a family or dependents when someone passes away. So unless the child earns income that a family relies on, child life insurance is often a waste of money. The Grow-Up Plan by Gerber Life Insurance is marketed towards parents and grandparents while using the familiar Gerber brand name to convince people they need it. If the products had to be sold based on their actual financial merits and performance, it would be a pretty tough sell.
Gerber Life Insurance OverviewThe Gerber Life Insurance Company is owned and operated by the Gerber Products Company, which is well known for their baby food product line. Founded in 1967, Gerber Life offers life insurance products for children under the age of 18. The company is very well known due to their cross promoting with baby products, and they have a fairly aggressive marketing strategy that targets new parents.
In general, Gerber Life Insurance products are very expensive and just about anyone can get better coverage elsewhere. They have also wrapped some of their insurance products around the idea of saving for college, which most experts agree is a bad idea.
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Gerber Life offers a number of different insurance related products, but their top three items are the Gerber Life College Plan, the Grow-Up Plan, and Term Life Insurance for adults.
Gerber Life College Plan – This plan covers the life of a parent while saving money for the child’s college expenses. The payout is issued when either the covered parent dies or the child reaches 18. There are guaranteed payouts of $10,000 to $150,000, depending on which plan is chosen.
The Gerber Life College Plan is very expensive in terms of insurance, and the payout is just about equal to what you put in. That means the actual interest earned on the money for college is very small. Most parents would do better by getting a term life insurance policy for themselves and investing the difference in something like a 529 college savings plan.
The Grow-Up Plan – This plan is a whole life insurance policy for children. Financial experts are quick to point out that whole life insurance products are pretty bad for the most part, and that is no exception here.
The Grow-Up Plan is very expensive and offers a low amount of coverage compared to a term life insurance policy. The difference is that the Grow-Up Plan will build cash value over time, but the rate is very low compared to other investment vehicles.
Term Life Insurance – This product is standard term insurance that Gerber Life offers to adults. Anyone can apply, and in most cases there are no medical exams prior to approval.
Gerber Life’s term coverage is good for someone finding it difficult to obtain life insurance, but the kicker is its expensive. At the time of this writing, a 30 year old, non-smoking male can get $150,000 coverage from Gerber Life for $36 a month. The same search on a life insurance brokerage website returned many companies offering the same coverage ranging from $9 to $14 a month.
Gerber Life Insurance RatesAs discussed prior, Gerber Life’s insurance products are very expensive compared to other companies out there. They do a good job of marketing to new parents and people who use their other products, and their trusted brand name goes a long way to getting new customers.
Gerber Life Consumer ComplaintsGerber Life Insurance Company is not accredited with the Better Business Bureau, but currently has an A+ rating with the organization. They have had 37 complaints filed in the past three years and 20 in the previous 12 months. The customer complaints filed with the BBB stem from two main categories, billing and problems with the product.
There were not a lot of complaints filed in the usual online consumer boards for Gerber Life. The number one complaint did not have anything to do with the product or service, but rather the amount of mail solicitations the company sends out.
Gerber Life Consumer Research ReportsIn a guide titled Parent’s Guide to Every Kind of Insurance, Consumer Reports claims that insurance should not be purchased for children since the entire point of life insurance is to help cover dependents in the event of an unfortunate death. They specifically refer to the Gerber Life’s Grow-Up Plan when discussing children and life insurance saying, “Unless your child supports your family in some way (say, as a child actor), you can opt out.”
Gerber Life Financial RatingsA.M. Best Rating – A
Fitch Rating – N/A
S &, P Rating – BBB
Gerber Life Insurance Overall RatingGerber Life Insurance Company is a well-known brand with strong financial strength. They are a good choice for adults that want a basic level of term insurance without having to do an exam.
People who are cost-conscience or want to see reasonable market returns for their investments should seek coverage elsewhere. A term policy with a highly-rated company along with a college savings plan like a 529 will outperform anything Gerber Life offers almost every time.
Anyone interested in term life insurance should visit our Recommended Insurance Company page for more information about top companies to buy from.
Gerber Life Insurance Contact InformationWebsite
www.GerberLife.com
Phone Number
800-704-2180
For a list of companies that we recommend, visit our Best Insurance Companies page.
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