I did a lot of pointless things with my money when I was younger. One of those was to purchase a life insurance policy for my son when he was born via the Gerber Grow Up Plan. Life insurance for your children is a bit pointless. The whole idea of life insurance is largely to help replace the income of the wage earner. Unless your child is a movie start and you’re sponging off his or her earnings, life insurance is a bit futile. Although I suppose if my son (heaven forbid) dies before the policy matures, it will pay for the funeral expenses.
I know that these policies bill themselves as savings vehicles for your children, should they live to the proper age of maturity, but, really, I’m thinking that when the time comes, my son will be lucky to get a semester’s worth of tuition out of it. I guess every little bit helps, but I’m thinking that there could have been a much more efficient way to get that semester’s worth of tuition.
What I’m really counting on to help with this whole thing is the 529 plan I’ve got for him. This is a much better college savings vehicle for my son, offering a better rate of return and even a tax advantage.
Do you think it’s worth it to purchase life insurance on your children?