Child insurance

When considering insurance for children, Brad Barrett and Jonathan Mendosa offer insights on various aspects in multiple episodes of the ChooseFI. Here are some key points they discussed:

1. Comparison with Investment Returns:

   • They compared the returns on investment versus child insurance policies. For example, investing $106 a month for 20 years at 8% returns could yield about $63,000, compared to a child insurance policy guaranteeing $32,000 for the same period 1.

2. Need for Child Insurance:

   • Mendosa emphasized that for most families, insuring children through life insurance might not be necessary. Child insurance makes sense only in rare situations where the child is a primary breadwinner, like child actors or special cases like Ryan's Toys 2.

3. Types of Child Insurance Policies:

   • Gerber's insurance products for children, like the Grow Up plan and the Life College plan, were discussed. These plans are marketed as secure investment options but often provide limited returns compared to other investment avenues 3.

     Child Insurance Comparison

     Brad Barrett

     Jonathan Mendosa

     Jonathan breaks down the numbers, showing how investing for your child's future can outperform traditional insurance policies. Brad's calculations reveal the potential growth difference over 20 years.

     

     ChooseFI

     149R | Whole Life Insurance

     Explore similar conversationsView full episode summary

     1

     2

     3

Barrett and Mendosa's discussions highlight that insuring children through life insurance might not be the best financial decision for most families. Instead, thoughtful investment in financial products that provide better returns might be a more beneficial approach.