My Personal Finance Journey

Personal finance observation, musing and decisions in a journey toward financial independence by 2020 with at least $3 million.


By Topics

Overall:
0. About (10)
1. My Progress (139)
2. Car & Home (107)
3. Credit (138)
4. Banking (33)
5. Saving (49)
6. Investing (308)
7. Taxes (89)
8. Spending (74)
9. Misc (97)
A. Archive (49)



MONTHLY ARCHIVE

Feb 2014 (3)
Jan 2014 (6)
Jan 2012 (1)
Apr 2011 (1)
Mar 2011 (1)
Feb 2011 (1)
Jan 2011 (1)
Dec 2010 (1)
Oct 2010 (1)
Sep 2010 (1)
Aug 2010 (1)
Jul 2010 (1)
Jun 2010 (1)
May 2010 (1)
Apr 2010 (1)
Mar 2010 (6)
Feb 2010 (2)
Jan 2010 (7)
Dec 2009 (3)
Feb 2009 (4)
Jan 2009 (8)
Dec 2008 (1)
Jun 2008 (2)
May 2008 (2)
Apr 2008 (5)
Feb 2008 (3)
Jan 2008 (15)
Dec 2007 (32)
Nov 2007 (6)
Oct 2007 (8)
Sep 2007 (9)
Aug 2007 (24)
Jul 2007 (2)
Jun 2007 (1)
May 2007 (3)
Apr 2007 (4)
Mar 2007 (4)
Feb 2007 (13)
Jan 2007 (6)
Dec 2006 (3)
Nov 2006 (7)
Oct 2006 (7)
Sep 2006 (6)
Aug 2006 (4)
Jul 2006 (10)
Jun 2006 (1)
May 2006 (3)
Apr 2006 (2)
Mar 2006 (6)
Feb 2006 (6)
Jan 2006 (3)
Dec 2005 (1)
Nov 2005 (9)
Oct 2005 (8)
Sep 2005 (13)
Aug 2005 (25)
Jul 2005 (16)
Jun 2005 (17)
May 2005 (19)
Apr 2005 (20)
Mar 2005 (24)
Feb 2005 (23)
Jan 2005 (36)
Dec 2004 (40)
Nov 2004 (34)
Oct 2004 (17)
Sep 2004 (21)
Aug 2004 (59)
Jul 2004 (37)
Jun 2004 (31)
May 2004 (29)
Apr 2004 (52)
Mar 2004 (49)
Feb 2004 (49)
Jan 2004 (31)
Dec 2003 (48)
Nov 2003 (52)
Oct 2003 (29)
Sep 2003 (8)
Aug 2003 (5)
Jul 2003 (2)
Jun 2003 (2)
May 2003 (5)
Apr 2003 (2)
Mar 2003 (2)
Feb 2003 (3)
Jan 2003 (29)



 

Life Insurance For Your Kids: Creepy, But...

Contributed by mm | September 10, 2004 10:54 PM PST

Should you purchase life insurance for your kids? There are already many personal finance articles telling you no, but Jeff Opdyke put the reasoning in the neatest way by sharing his struggle in his WSJ column.

Let me summarize some rational and/or emotional reasons below:

1. Do you want to benefit from the death of your kid?

2. Kids don't produce income, so the only tangible loss is burial cost. Do you really need an insurance to cover the small cost of burial?

3. Think insurance as a saving tool at the minimal? Life insurance for kids can hardly be an efficient saving vehicle. Try tax-advantaged 529 plans or Coverdell Education Saving Accounts for your kids' college expenses.

To put it into perspective, GerberLife.com offers to provide $10,000 coverage to my 2-year old at $7.28/month (WA Grow-Up Plan). The rate is guaranteed until my kid turns to 21, and the cash value is equal or higher than the total premium paid after 20 years. Coverage can be as high as $20,000. (Yes, it is Gerber the baby face -- do you know Gerber is also in the business of insurance writing?)

By simple math, I need to pay $87.36 a year for $10,000 benefit. I don't think I will be in short of $10,000 for the rest of my life, so the insurance coverage really does not mean anything to me. Think this as saving? Is less than $100 a year enough to cover the college books, not to mention tuition?

My kid's college is still 16 years away, but I plan to start a Coverdell account by next year -- of course I expect my kiddie to complete at least a 4-year college, and it does not hurt to take some tax advantage in the process. (Why do I prefer Coverdell over 529 plans? Let me find some time to discuss that next time.)

More PFBlog Articles You Might Find Interesting ...


This Post Has Received 2 Comments. Share Your Opinions Too.


George Commented on September 11, 2004

I agree that purchasing life insurance for children is a complete waste for almost everyone. Setting aside money for your children's future is the way to go.

I noticed that you are planning to open a Coverdell acount for your kid. I'm also planning to do the same. I'm interested in knowing what broker you are going to use for this account. I'm having a hard time figuring out which brokers allow Coverdell accounts and don't charge excessive fees. You know you can also have a 529 in addition to the Coverdell account. I have a 529 account in order to take advantage of Virginia's deduction for 529 contributions.

I look forward to more discussion on this topic in the future.


life insurance canada guy Commented on November 9, 2004

I agree wholeheartedly with you - unless there's a financial need, I don't see any need to life insure my children either.

What I do have is a 'children's protection rider'. My life insurance policy has a rider that covers all of my kids from something like 10 days to the age of 18, for one price. I forget what it cost exactly, but it's negligible; $20 or $50 per year for 10K of insurance and covers all my kids.

The other thing that it does IIRC is that they can chop off the insurance when they get older into their own individual permanent policy. Just in case for some reason they can't get insurance.

I'm pretty sure most life insurance policies will have a similiar feature. Unlike a seperate policy, I think it can be a cheap way to cover the burial costs without going whole hog into a seperate life insurance policy for them.



Read More ... 102 Posts In The Same Category










This page was last rebuilt at January 27, 2014 07:45 AM PST.
 

RSS FEED





PERSONAL FINANCE BLOGS I READ

Consumerism Commentary
Get Rich Slowly
My Money Blog
All Financial Matters
The Simple Dollar






.

Error 500 - Internal server error

Error 500 - Internal server error

An internal server error has occured!
Please try again later.



Copyright 2003-2014, PFBlog.com. All Rights Reserved. (Privacy Policy)