mingster

I've been advised by both camps:

one side said it's a wonderful gift to give to your child if you start buying life insurance for the baby when the baby is born, this way the insurance will be cheap and also will cover the child's next generation (your grandchildren).

another side said it's a waste of money.

so, what's your take on this? My baby is coming in August

jmc1971

Depends on what you're using it for--your post isn't clear. Are you talking about "overfunding" it and using it as an investment for later in his/her life (post-college)? Or are you trying to save for college?

My .02 is that I wouldn't bother with insurance for a child. I'm sure there's an insurance guy on the board who can give you some good ideas, though.

Have you considered a Roth IRA or a 529 Plan?

mns2k

Before one can answer the question you need to be more specifc as to your goals. Are you looking to buy term or whole life. Are you looking at it as an investment or a true life policy if the child (G*d forbid) dies. If it is an investment are you looking to pay out the policy at age 21 or using a roll over feature that will cease payments for the remainder of the persons life.

If this is an investment you would be better off with starting an IRA / Roth IRA and constantly invest. You could also do a "DRIP" account with some Fortune 500 Companies.

Just some things to think about

ironwedge

I can't fathom trying to profit on the death of a child, which is basically what your doing with a child's policy. In my mind insurance is there to ensure that your dependants can meet financial obligations in the absence of the family breadwinner.

For education expenses, there are a number of tools that would probably serve you better (education IRA, 529, etc.).

My 2 cents.

mingster

Hmm, I didn't consider the IRA aspect - ROTH IRA would be excellent, wouldn't it? 529 plan sounds good as well.

mingster

No, I won't be the beneficiary. My grandchildren would be - that's the reasoning behind my question. I was told that if the baby started a life insurance early, his/her offsprings can benefit with more insurance if my child dies before my grandchildren are of age.

ninegrand

I wouldn't be quite so concerned with providing insurance for children that aren't even born yet (grandchildren). Again your goals for the premium you will pay need to be looked at.

I am in the insurance field (though not a life specialist) and would take a hard look at the investment side for education before spending $$ on life insurance.

Waay too many details need to be looked at to offer solid advice here

Boit

As a former agent, I'll add my .02 worth. Whole Life is a total scam and not worth even considering. Only uninformed buy those policies now. Term life insurance in the amount needed to perform a proper burial would be prudent and the cost would be extremely low. I'd say a $10,000 policy would be plenty. It would be difficult to insure a very young child at higher amounts due to "insurable interests", meaning, that the child has zero earning power and no dependents. The other comments and advice on starting a separate savings/investment accounts are valid. Certified Financial Planners can be of help but I find their fees far too high. Some Mutual Fund companies offer the types of investments you are looking for, just make sure you read the prospectus carefully and know what fees they charge. Fidelity and Vanguard are two reputable firms. You can also do your own research on the web with Google or other search engines. Some of the federal savings bonds are worth a look as well. Personally, I've bought EE savings bonds for my granddaughter.