Should You Consider the Gerber Grow-Up Plan for Your Child?

Core Insights - The Gerber Grow-Up Plan is a whole life insurance policy designed for children, allowing parents to lock in low premiums at an early age while providing a savings vehicle for future expenses [7][16][19] - The plan offers a maximum death benefit of $100,000, which is considered excessive for a child but insufficient for an adult with dependents [19][32] - Financial advisors often recommend alternatives like mutual funds for college savings due to historically low returns on cash value life insurance [22][30][31] Group 1: Gerber Grow-Up Plan Overview - The Gerber Grow-Up Plan is marketed to new parents and can be purchased for children aged 14 days to 14 years [27] - The plan features a cash value component that grows over time, which can be accessed by the child when they turn 21 [26][29] - Upon reaching age 18, the death benefit automatically doubles at no additional cost [28] Group 2: Advantages and Disadvantages - Advantages include providing life insurance coverage for children and a savings vehicle through its cash value account, which can be transferred to the child at age 21 [17][25] - Disadvantages include the plan's limited death benefit for adults and the argument that life insurance for children is often unnecessary and can be costly [18][32] - The cash value growth is typically lower than that of mutual funds, making it less effective as a college savings plan [22][30] Group 3: Financial Considerations - The Gerber Grow-Up Plan can serve as a college savings vehicle, but its investment returns are generally lower than those of 529 plans or mutual funds [30][31] - Families may find the premiums to be an added financial burden, especially if they are already managing other costs associated with raising children [25][32] - The combination of a child rider for life insurance and a mutual fund for college savings is suggested as a more effective alternative [31]