Life insurance for children

[hamster]

For those that didn't see my post on ML, H has a mutated gene in his family that causes ALS. He has not been tested yet, but has a 50% chance of having the gene. We plan on loading him up on insurance before finding out any results.

My question though is for our children. If H is positive, then they too will have a 50% chance of the gene.
I'm not terribly familiar with children's life insurance. ALS is hitting younger generations than previously, but it's still not a kids disease. But I did a child policy will allow them to get insurance later in life when they otherwise wouldnt be able to. Can anybody expand on that? Would it make sense to get them a policy as well?

[waverly]

No, I don't think getting them life insurance now will mean that they are eligible for life insurance later in life. It isn't like health insurance where if you never have a gap you are covered for pre-existing conditions but if you do have a gap you are not. Something that Obamacare tried to address and fix, so I don't know what the exact status of that is because they did try to get rid of all that pre-existing conditions crap.

Some people do a term life to cover expenses up until age 18. Some people do a whole life policy as a gift to their child. It would build up money in it, but not much, like it's not a good investment vehicle. But then they could have their policy their whole life and it cannot be rescinded no matter what in the future. Each policy as far as I know is underwritten totally and completely separately, so previous policies would have no bearing on new policies. Also, it is strongly discouraged in the industry to churn policies (make people cancel and get a new one or convert a policy so the salesperson can get a commission). It's generally not in your best interest to cancel and get a new one later one partially because in a whole life it does build up money and the payments are less when people are younger versus older. So if you do pick a whole life policy that will be what you would be sticking with for as long as you want/ need.

Have you thought about long term care insurance for either your H or child?


I was just looking at Gerber life insurance because I thought it might be a plan that converts to another plan, but no its a whole life policy which just adds the amount of cash built up to the face value of the policy which is pretty typical of whole life. But something to ask your broker/ agent if you choose a whole life option.  Actually the Gerber one does say option to buy more later regardless of health conditions.  That wasn't true of my insurance company, but I wonder if they do some sort of pull out your cash value to buy term with it type thing? 

[VillainV]

We got a Gerber policy for our son as a baby, and it covers him through adulthood for the rest of his life. Which is good because he had childhood cancer and is not likely to qualify for most policies as an adult. It doesn’t offer a ton of coverage, but I think the amount increases after he turns 18 or 25 or whatever.

[4speedy]

We do not have insurance on our kids but I do recall our financial planner telling us something like what you describe. If you get insurance on them now, when they reach adulthood, the policy can be converted into some other type of policy, even if they have a disqualifying medical condition. I don’t remember the details, but you are absolutely right in thinking you need to look into this further.

[rooster222]

Oct 27, 2019 7:01:59 GMT -5 4speedy said:

We do not have insurance on our kids but I do recall our financial planner telling us something like what you describe. If you get insurance on them now, when they reach adulthood, the policy can be converted into some other type of policy, even if they have a disqualifying medical condition. I don’t remember the details, but you are absolutely right in thinking you need to look into this further.

We have something like this for our daughter. She has a genetic disorder and we were told by a few different places that she was uninsurable. My former workplace worked with Lincoln Insurance (I think) and they told me that they'd insure her as long as she had no hospital visits, including normal stuff like bloodwork, for a certain period of time she could be insured. So, we ended up getting 2 small policies that can be converted later. It's not a lot of coverage and inexpensive but nice to know we have a little something should her health decline.

[SusanBAnthony]

How much are these childhood policies for, though?

I think you'd have to run the actual numbers. You'd be paying premiums for maybe 40 years- are you really not better off just saving that money? Until your kid was an adult with their own family, there really is no need, assuming you can cover funeral costs.

[awkwardpenguin]

I'm sorry you are going through this.

Tagging kershnic because I think she has some knowledge on this topic.

[jlt19]

Oct 27, 2019 21:45:59 GMT -5 SusanBAnthony said:

How much are these childhood policies for, though?

I think you'd have to run the actual numbers. You'd be paying premiums for maybe 40 years- are you really not better off just saving that money? Until your kid was an adult with their own family, there really is no need, assuming you can cover funeral costs.

While I agree with most of this for OPs situation, I don't think having a term policy is a bad idea for every parent.

I have $50k 30yr term for both of my kids because if something were to happen there may be medical expenses to pay back. And if not, no way am I returning to work after 3 days which is our current stated policy. While I'd hope my employer would make an exception, the $90/year I pay for the policies is a guarantee.

[kershnic]

Oct 28, 2019 9:56:18 GMT -5 awkwardpenguin said:

I'm sorry you are going through this.

Tagging kershnic because I think she has some knowledge on this topic.

(please don't quote, might delete)
I don't actually know much about this.....  I personally have a decent sized whole life policy that was purchased for me by my grandparents when I was very young.  I don't know if MM would consider this a "bad investment", as this seems to be the typical advice when whole life insurance comes up, but my grandparents did it.  At that time in their lives my grandparents were fairly economically well off, but I really do not know the financials of what they paid for my policy.  The policy now generates enough interest that it pays for itself and I fully intend to keep it until my death.  As an adult I have some health issues that I understand would make term life insurance expensive or impossible to acquire.  Whether or not it was/is a "good" investment, it's one that I'm happy my grandparents made for me as it gives my family a financial security that we would not otherwise have.  Worst case scenario my family will have several years of income replacement for me, and best case scenario I'll die in old age and my children will have that money for an inheritance. 

[hamster]

Oct 26, 2019 19:58:54 GMT -5 VillainV said:

We got a Gerber policy for our son as a baby, and it covers him through adulthood for the rest of his life. Which is good because he had childhood cancer and is not likely to qualify for most policies as an adult. It doesn’t offer a ton of coverage, but I think the amount increases after he turns 18 or 25 or whatever.

I'm so sorry, I don't think I knew that about your son.

Do you mind me asking how much your premiums are?

[hamster]

Oct 27, 2019 21:45:59 GMT -5 SusanBAnthony said:

How much are these childhood policies for, though?

I think you'd have to run the actual numbers. You'd be paying premiums for maybe 40 years- are you really not better off just saving that money? Until your kid was an adult with their own family, there really is no need, assuming you can cover funeral costs.

I tend to agree, but since there is a high chance they won't be able to get their own policy as an adult I was wondering if it would be a good idea in this situation. Not because I want/need the benefit, but to set them up for adulthood and their own families.

[mlkgls]

I don’t have any advice, but I didn’t want to read and not respond. I’m sorry you and your family are having to worry about this. 

I wonder if there is an insurance calculator that might help determine whether it would make more sense to self-insure once you have a better idea of the premium cost vs coverage. 

[ribollita]

I’m sorry you are facing this.

Not the same, but one of my kids is not insurable, since birth, and it sucks but it is what it is. The child should still be eligible for employer life insurance if and when that still exists in 20 years.

I also have a 10,000 insurance policy on this child through my work, which had no health requirements.