Borrowing Against Your Child's Life Insurance: Is It Possible?

Gerber Life Insurance offers a range of life insurance plans, including the Gerber Life Grow-Up® Plan, which is a whole life insurance policy for children. This plan provides lifelong coverage for the insured child as long as premiums are paid and offers several benefits, such as a locked-in premium rate, coverage that automatically doubles during the child's 18th year, and the option to purchase additional coverage as an adult. One notable feature of the Grow-Up® Plan is its ability to build cash value over time, which can be borrowed against to meet unexpected expenses. This cash value accumulates as Gerber Life sets aside a small portion of the monthly premium payments, and it can be accessed through a policy loan or by surrendering the policy. Therefore, the answer to the question, Can I borrow against my children's Gerber Life Insurance policy? is yes, as long as the premiums are paid and the policy has built up sufficient cash value.

Borrowing against the cash value of the policy

This cash value can be borrowed against by taking out a policy loan, which has an interest rate of 8% and may impact the cash value and death benefit. Borrowing against the cash value of the policy is a good solution if you need immediate funds but want to maintain your life insurance protection. It is also flexible, as you do not have to pay back the loan, but if you choose not to, the borrowed amount and interest will be deducted when the policy's death benefit is paid or the policy is cashed in.

If you decide to cancel the policy, you will receive the accumulated cash value minus any outstanding debt against the policy. This is also true if your child becomes the policy owner after turning 21. Additionally, if you are unable to pay your monthly premiums, Gerber Life may be able to pay them for you using the available cash value of the policy.

The Grow-Up® Plan is a valuable way to provide financial protection for your child and build a nest egg for their future. By borrowing against the cash value, you can access immediate funds while still maintaining the benefits of the policy for your child.

The Grow-Up® Plan

The Gerber Life Grow-Up® Plan is a whole life insurance policy for children that offers lifelong coverage for the insured child as long as premiums are paid. Here's how it works and what you need to know:

How the Grow-Up® Plan Works

Coverage

The coverage amount of the Grow-Up® Plan automatically doubles during the year your child turns 18, at no extra cost. For example, a $25,000 policy would double to $50,000. This provides your child with increased financial protection as they become an adult.

Guaranteed Right to Buy More Coverage

Builds Cash Value

While the Grow-Up® Plan offers several benefits, there are some considerations to keep in mind. The cash value of the policy may not provide the same growth potential as other investment options, such as mutual funds. Additionally, the maximum death benefit of the Grow-Up® Plan is $100,000, which may not be sufficient for an adult with dependent children. It's important to weigh the benefits against the costs and alternative investment options to determine if the Grow-Up® Plan is the best choice for your family.

Locked-in premium rate

Gerber Life Insurance offers a range of plans, including the Grow-Up® Plan, which is a whole life insurance policy for children. This plan provides lifelong insurance protection for the child, as long as the premiums are paid. The Grow-Up® Plan is designed to build cash value over time, which can be borrowed against by the policy owner to help with unexpected expenses. This cash value is built by Gerber Life setting aside a small amount of money from each monthly premium payment.

The premium rate for the Grow-Up® Plan is locked in at a childhood rate, which will never increase as long as the premiums are paid in full. The cost of the plan depends on the amount of coverage chosen, the child's age at the time of application, and the state in which the policy owner lives. The premium amount can start as low as $3.70 a month for $5,000 in coverage for a child less than a year old, with automatic deduction from a checking or savings account.

The Grow-Up® Plan offers guaranteed coverage for the child's lifetime, with the option to purchase additional coverage as an adult at standard adult rates, regardless of health or occupation. The coverage amount also automatically doubles at no extra cost when the child turns 18. For example, a $25,000 policy becomes $50,000 when the child reaches the age of 18.

In addition to the Grow-Up® Plan, Gerber Life Insurance offers other plans such as the Young Adult Plan for teenagers, the College Plan as an alternative to traditional college savings accounts, Term Life Insurance, Whole Life Insurance, Guaranteed Life Insurance, and Accident Protection Insurance. These plans provide varying levels of coverage, benefits, and eligibility requirements.

Coverage automatically doubles during age 18

Gerber Life Insurance's Grow-Up® Plan is a whole life insurance policy for children that offers lifelong coverage for the insured child as long as premiums are paid. Here are some key details about how coverage automatically doubling during age 18 works under the plan:

Coverage Doubles at No Extra Cost

On the policy's anniversary date during the year your child turns 18, the coverage amount will automatically double at no extra cost. For example, if you initially purchased a $25,000 Grow-Up® policy, it would increase to $50,000 when your child turns 18. This means your child will have twice the coverage for the same monthly payment.

Locked-in Premium Rate

Even as the coverage amount doubles, your premium rate will remain locked in and will not increase. This means your child will benefit from more coverage at a better value.

Guaranteed Right to Buy More Coverage as an Adult

The Grow-Up® Plan guarantees your child the right to buy more life insurance coverage as an adult, up to ten times the original policy amount, regardless of their future health or occupation. This can provide added financial protection as your child's adult life evolves.

Builds Cash Value

The Grow-Up® Plan also builds cash value over time, which your child can borrow against to help with unexpected expenses. This cash value grows with each premium payment and can be a valuable source of funds in case of emergencies.

Peace of Mind for Parents

By setting your child up with the Grow-Up® Plan early on, you gain peace of mind knowing that they will have continuous life insurance coverage as they transition into adulthood. This can be especially beneficial if your child faces health issues or takes on a high-risk occupation later in life, as they won't have to worry about being denied coverage.

Borrowing against the policy to cover unexpected expenses

The Gerber Life Grow-Up Plan is a whole life insurance policy for children that builds cash value over time. This cash value can be borrowed against to help cover unexpected expenses. Here's how it works:

Each time you make a monthly premium payment for your child's Grow-Up Plan, Gerber Life sets aside a small portion of that money. Over time, this becomes the cash value of your policy. This money is available for you to borrow against if you ever need cash. As the policy owner, you can borrow against the cash value by taking a policy loan. The interest rate for policy loans is 8%, and the loans may impact the cash value and death benefit of the policy.

It's important to note that any loan debt against the policy will reduce the amount you or your child would receive if the policy was surrendered or the payout amount to beneficiaries. Additionally, you will need to continue paying premiums to borrow against the policy.

The Grow-Up Plan provides valuable financial protection for your child and can help build a small nest egg. By planning ahead, your child can benefit from this whole life insurance coverage and cash value in the future.

• Borrowing against the policy's cash value to cover immediate expenses without sacrificing life insurance protection.
• Using the cash value to pay monthly premiums if you are temporarily unable to make the payments.
• Surrendering the policy and receiving the accumulated cash value if you decide to cancel the policy.

The Grow-Up Plan offers flexibility and peace of mind, knowing that you have the option to borrow against the policy's cash value if unexpected expenses arise.

Frequently asked questions