Gerber Life is one of the largest providers of child life insurance in the US. They offer a wide variety of life insurance policies ranging from the usual term, whole, and guaranteed life along with college and accidental insurance plans.
In this article, we’ll take a closer look at what the company has to offer as well as their main strengths and weaknesses. Lastly, we’ll share our recommendation on whether or not Gerber Life is a good choice for your needs.
History of Gerber Life Insurance Company
Gerber Life Insurance was founded in 1967 by the Gerber Products Company, the people behind the world-renowned baby food products. Their main products back then were simplified life insurance for underserved middle-income families and medical stop-loss insurance for small and medium-sized businesses.
In 2007, Nestle acquired both Gerber Products and Gerber Life Insurance. More than a decade later, Nestle sold Gerber Life Insurance Company to Western and Southern Financial Group for $1.55 billion. Gerber Life has more than $52 billion life insurance in force from their 3.6 million individual policies.
Gerber Life Insurance Company Financial Ratings
- A.M Best: A (Excellent)
- S&P: A
Gerber Life Insurance Products
Gerber offers a decent selection of insurance products ranging from children and young adult policies to the usual term and whole life insurance. They also offer Accidental and Dismemberment Insurance and guaranteed issue policies.
Gerber Life Grow-Up Plan
The first question that most people ask when they learn about child life insurance is this:
Why should I buy life insurance for my child?
Most parents who have purchased one typically provides one or more of the following reasons:
Guarantees insurance coverage for medical condition
It helps in guaranteeing insurance coverage in the event the child develops a medical condition or poor health. There’s a chance that the child may not be in a favorable health condition later in life. This could lead to them having a hard time getting a policy or end up paying expensive premiums simply because they’re not in a good health class.
Locks in cheaper rate
By purchasing child life insurance, they lock-in the cheaper rate that doubles in benefit when they hit 18 years old without any increases in premiums. Also, they’ll have the option to continue it when they become adults and enjoy a lifetime policy as long as they’re paying premiums.
Prepares for the future
It allows you to help your child financially in the future. Since Gerber Life Grow-Up plan is whole life insurance, it comes with a cash value that builds up and can be accessed by your child later. It allows you to help them build a nice little nest egg that they can tap into if needed.
The Gerber Life Grow-Up Plan is a type of whole life insurance created to provide coverage for your children as young as 14 days (up to 14 years old). Their policy starts at $5,000 and tops at $50,000 and gives the benefit of a locked-in rate even when the child hits adulthood (21 years old) and decides to continue the policy. At this time the ownership of the policy transfers to them and they will have the option to buy additional coverage, regardless of their health or occupation.
The cash value accumulates as long as the policy is in force. In addition, the benefit amount doubles automatically (without an increase in premiums) when the child hits 18 years old. Your premium rate depends on your child’s age when you purchase the policy, the state where you live, and the amount of coverage.
Gerber Life Insurance for Young Adults
If you’re a parent, grandparent, or a legal guardian, you can purchase Gerber’s Young Adult Life Insurance and get them a whole life policy that’s designed specifically for teens aged 15 through 17. Same with their Grow Up plan, policies start at $5,000 and maxes at $50,000. You (the person who purchased the policy for them) will be the policyholder until they reach 21 years old, which is when the ownership gets transferred to them.
When they hit 18 years old, the benefit will automatically double without incurring an increase in premiums. So if you purchased a 20,000 policy, for example, the new benefit will be $40,000 for the entire term of the policy. The Young Adult Life insurance is whole life, so there’s the added cash value benefit that grows the longer the policy remains in force.
Gerber Term Life Insurance Plan
The preferred affordable life insurance of most people, term life insurance at Gerber, starts with coverage of $100,000. It tops at $300,000 and you can purchase it in 10, 20, or 30-year terms. It serves as a great option for newlyweds and young families. Especially those looking for flexible insurance protection that isn’t as expensive as permanent life.
How cheap is Gerber’s Term Life policy? According to their website, you can get a $100,000, 20-year policy for an 18-year old female for as little as $15.42 per month.
The rates are guaranteed to not change as long as the policy is in effect. Gerber’s website claims that most applications don’t require a medical exam. It’s required if you’re 51 years old or older though. But this means they can provide a decision within minutes in most cases.
You are allowed to renew the policy at the end of the term using the premium rate for your age at that time. This can be a plus since your health most likely has declined by then (you aren’t required to take a new medical exam).
Gerber Whole Life Insurance Plan
If you’re looking for lifetime protection that doubles as a nice little nest egg for the future, then whole life insurance is a great choice.
Gerber’s whole life offering starts at $50,000 and maxes at $300,000 worth of coverage. Individuals aged 18-70 can apply and according to Gerber, no medical exam is required in most cases. The rates of the premium are locked in and cannot be canceled as long as the premiums are paid.
Since it’s whole life, you can borrow a portion of the cash value at a loan interest rate of 8 percent. If you are below 51 years old, you can qualify for a policy without taking a medical exam if the benefit is less than $100,000. This makes it a fairly good alternative to simplified issue whole life. Other companies typically offer a maximum of $50,000 benefit only if without the medical exam requirement.
Gerber Guaranteed Life Insurance
Guaranteed life insurance is commonly known as “final expense insurance”. It’s created to provide the loved ones of the policyholder the ability to pay for funeral expenses.
Gerber offers guaranteed life insurance coverage to individuals aged between 50-80 years old. The minimum benefit amount is $5,000 and tops at $25,000.
In 2017, the average funeral and burial cost in the US is $7,360, according to this report by the National Funeral Directors Association (NFDA). A benefit coverage of $10,000 should be sufficient in most cases for these types of expenses. Some people though opt to go for a higher coverage especially if they have other unsettled bills or debts to pay.
Applicants are not required to answer any health questions or undergo any medical exams. Simply fill out the form and submit. Gerber accepts and approves since it guarantees life insurance.
Gerber Accident Protection Insurance
In case you’re wondering, what’s the difference between Accident Protection Insurance and term life insurance?
Term life insurance will provide the beneficiaries with a death benefit regardless of the cause of death. The benefit amount is also significantly higher and can go from a couple of hundred thousand dollars to a few million.
Personal accident insurance, on the other hand, pays off hospitalization or death benefit. This is only in the event of disability or death arising from an accident. There are plenty of life insurance companies that offer it as a rider to their term or whole life offerings. This way policyholders can get instant cash benefit for covering accident expenses. In Gerber Life’s case though, they offer it as a stand-alone insurance product.
The Gerber Life Accident Protection Plan gives a cash benefit of up to $100,000 in the event of accidental death and disability or injury. Acceptance is guaranteed and how much you’ll pay in premiums is locked in for the duration of the policy. It’s available to individuals aged between 19 and 69 years old.
Gerber College Plan
Gerber markets their College Plan as a “safe and easy way to help pay for college”. It combines the benefits of adult life insurance and guaranteed growth for the money you put in.
The company promises a guaranteed payment of 10,000 minimum up to $250,000 when the policy matures. This is if there was no lapse in premium payments. No matter how the market performs, Gerber claims that your money will continue to accumulate and grow in value. This way you’ll be ready to pay for your child’s college education.
And the benefit doesn’t have to be specifically used for college, unlike educational IRAs or 529 plans. In the event the policyholder stops paying premiums, you receive all the money you paid as long as you’re past the midway point of the policy.
The Gerber College Plan has a built-in life insurance benefit which will pay the beneficiary (the policyholder’s child) with a death benefit should the policyholder pass before the plan’s maturity.
Gerber Life Insurance Riders
Gerber only mentions one policy rider on their website, and that’s the Waiver of Premium Rider. It allows the policyholder to continue coverage when they become disabled and don’t have the means to pay the premiums.
Gerber Life Insurance Pros and Cons
|Lets you lock in cheaper rates that won’t change when your child decides to continue with the policy as an adult||Cash value build up on their Grow Up plan is very slow|
|Most plans don’t require a medical exam||They only have one
rider: Waiver of Premium which means there’s a very limited level of
|Child life insurance doubles in benefit when they hit 18 without any change in premiums||A regular term or permanent life insurance with a child rider might provide the same benefits|
|A wide selection of policies to choose from||If your focus is on saving up for college, a 529 savings plan might be a better option as the cash value in their college plan is taxable which reduces the overall benefits|
|Their max benefit is considerably lower compared to other life insurance companies|
Gerber Life Insurance: Is it for you?
If you’re looking for life insurance products that are specifically created for your children, then Gerber Life’s offerings are worth looking at. Their wide selection of policies covers what most people need. This is albeit with lower maximum coverage amounts when compared with other insurers.
There are plenty of discussions over the years over the real value of getting stand-alone life insurance for your child. How you measure each side’s pros and cons will ultimately depend on two things: The level of coverage you need and how much you want or can pay for it. That’s why it’s absolutely important to do your due diligence and check all possible options first before purchasing a policy.
Overall, Gerber Life’s main draw lies in their child-centric life insurance products, but sadly, nothing else. Their term, whole, and guaranteed issue policies don’t offer any obvious advantage to offerings from other companies and the benefit amounts are in the lower end of the spectrum.
So unless you’re specifically looking for child life insurance, it’s best to check out other options. And if you need help in choosing the best policy for your needs, our team of experienced advisors will be more than happy to assist and provide you with a free quote.
Bear in mind that some of the links in this post are affiliate links and if you go through them to make a purchase I will earn a commission. Keep in mind that I like these companies and their products because of their quality and not because of the commission I receive from your purchases. The decision is yours, and whether or not you decide to buy something is completely up to you.