Gerber Life Insurance Company Review
I’m sure you are familiar with Gerber’s baby food products, and you may be asking, “are the makers of a baby food feeding my kids and selling me life insurance?” Let’s look at a little company history to help shed some light on the relationship between these products.
In 1967, the Gerber Life Insurance Company was formed as a subsidiary of the Gerber Food Company. The goal was very simple: Since parents trusted Gerber to feed their children, Gerber also hoped that parents would trust them with the security and financial goals they had in mind for their children, and thus would consider buying a child life insurance policy from them. Today, Gerber sells a lot more than child life insurance. They have also transitioned into term, whole, and guaranteed life insurance products.
Today, Gerber Life is licensed to sell life insurance throughout the United States, Canada, and Puerto Rico. Gerber has over $45 billion of life insurance products in force and over 3.3 million policies.
Related: Top 20 final expense companies.
Gerber Life Insurance Company Ratings
According to A.M. Best, an industry leader that measure insurance company ratings, Gerber Life Insurance Company has an A (excellent) rating, as of May 26, 2016.
What Products Do They Offer?
Gerber now offers six different life insurance products. Let’s take a look at each one.
Grow Up Plan
This is a life insurance policy that you, as the parent, buy for your children. This is a way you can help your child in preparation for the future. The parent stays the policy owner until the child reaches the age of 21, and then he or she becomes the policy owner. This meaningful gift, as Gerber says, lasts a lifetime. Gerber also provides the child with up to four opportunities to buy additional coverage, regardless of health issues, insurability, or profession:
- At ages 21, 25, 30, 35, or 40.
- When he or she gets married.
- When he or she has a child of their own.
Each new policy can be up to the maximum coverage amount they had at the age 18. Key points of this policy:
- Coverage limits are from $5,000 to $50,000 for children 14 days to 14 years old.
- This is whole life insurance coverage, which builds cash value.
- Premiums start as little as $1 per week, and never increase.
- Coverage doubles at age 18. This means, if you bought $25,000 coverage when your son was 12 years old, when he reaches age 18, his coverage will be $50,000, with no increase in premiums.
- There is guaranteed future insurability, regardless of your child’s profession or health challenges that may occur in the future.
Term Life Insurance
Gerber Life Insurance Company also offers term life insurance for young families to protect their future. Term life insurance has no cash benefits and has the lowest premium. These policies may be suitable for a young family with a lower budget, or someone who needs insurance for a specific period of time. The term amounts are from $25,000 to $150,000 for 10, 15, 20 or 30 years.
It’s worth it to mention that these policies are simplified issue, which means no medical exam is needed, and there are only a few health questions on the application for clients ages 18-50. The premium is guaranteed for the policy’s contract duration, as with most term life companies. However, the pricing isn’t as competitive as other insurance companies, such as Banner or AIG, for instance. Also, the maximum death benefit of $150,000 isn’t sufficient for most individuals.
Gerber 20-Year Term Rates for 40 Years Old Male
Gerber Life vs Others Carriers’ Sample Monthly Rates
Whole Life Insurance
As the name implies, whole life insurance lasts forever (as long as you still pay), until you die. Whole life builds cash value which you can borrow against, and the cash grows tax free. This is also a simplified issue policy, with no exam and limited health questions.
There are many different opinions regarding term vs whole life, on which I will not comment now because this article is about Gerber. However, buying whole life coverage just because we can’t predict our death date doesn’t make any sense. Whole life comes with a higher premium and may not work for everyone. The coverage amounts are from $25,000- $150,000.
This policy has no health questions, no exam needed, and you are guaranteed to be accepted as long as you are between 50 to 80 years old and a US citizen (or a permanent resident). The face amounts are from $5,000 to $25,000.
They are typically called “final expense” or “burial insurance” because of the low death amounts. People who buy these policies have one thing in mind and it’s the expenses that are involved when they are no longer here.
It is also a whole life policy, which means it can’t be canceled, and it builds cash value tax-deferred. You are probably asking now, “what’s the catch?”
A big one: it’s called graded benefit, which means the insurance company will NOT pay death benefits if you die within the first 2 years after you buy the policy. If the death is a result of an accident, they will pay the full amount, however, if the cause of death is not accidental, they will only pay the amount of premium paid so far, plus 10% interest. Only after the second year of the policy being in force will they pay the full benefits.
This isn’t a “Gerber thing,” every guaranteed issue policy on the market has this clause in the fine print. (Read it, or get an insurance broker to explain this to you, it’s very important.)
The premium will stay level (never increases) and this policy can’t be canceled by Gerber. Guaranteed issue policies are priced higher since this is the only way an insurance company can increase their odds. Life insurance rates are very simple. The younger and healthier you are, the better the rate you will get, while the older and sicker you are, the more you will pay (or risk being rejected altogether) because you pose a higher risk to the company.
If you must have a policy and can’t get a policy anywhere else, a Gerber Guaranteed issue policy is a great choice, and they are very competitive price-wise.
Gerber Life Guaranteed Issue Sample Rates
Male Monthly Rates
Female Monthly Rates
Accident Protection Insurance
Accident insurance isn’t a traditional life insurance. Let me explain – a traditional life insurance policy covers you in case you die from any cause, such as cancer, heart attack, or a car accident.
You have no idea how many times I hear that people bought “life insurance” for $1.92 per month, and before they continue or I read the policy, I already know what they actually bought – an accident policy!
Be very careful if the rate sounds too good and the salesman speaks faster than your mother-in-law. Accident policies with Gerber have $20,000 to $100,000 in coverage, and there are no exams or health questions, regardless of occupation or health history. There is no waiting period, the monthly payment will never increase, and benefits can never be reduced. However, I personally would opt for a true life insurance policy instead, since an accident insurance covers you only for a death that is the result of an accident.
Gerber Life College Plan
This is money for college plus an adult life insurance policy, all in one package. This is a way for a parent to save money for their child, and guarantee savings for college at the same time. You pay a monthly premium and when your child is ready for college in 10 or 20 years, you will have guaranteed funds for their tuition from Gerber in the amount of $10,000 to $150,000, depending on the selection you have made.
This plan does incur taxable income that you must report, however, the good news is that the benefits are not subject to the stock market fluctuation, and the benefits are guaranteed as long as you pay your premium. If you pass on, your beneficiary is guaranteed to collect the death amount you chose when you buy the plan. The money doesn’t have to be used for college only—think about this plan as a term insurance policy that has cash value. The term year options are between 10 to 20. You can’t buy a plan for 5 or 7 years, the minimum is 10 and the maximum is 20.
Is Gerber a Good Choice?
Gerber Life and many other companies have their strengths and weaknesses, and not all products fit each and every one person. If you need more than $150,000 in death benefits, Gerber isn’t for you, since the max benefits are only $150,000. If you are after a guaranteed issue policy, Gerber Life is one of the best choices out there.
Gerber has great brand recognition, however, they are not competitive when it comes to their term policies. Yes, they are simplified issue and have fewer health questions on the application, but you will get a much better rate with other no-exam companies such, as Sagicor. If you are healthy, always choose a fully underwritten plan to get the best rate.
We work with all insurance companies, including Gerber Life. We also believe that there is no one insurance company that fits everyone. Each and every person has different goals and health issues, and consulting with an insurance broker may give you few points to think about that you couldn’t realize yourself. Working with a broker is free of charge because we get paid by the insurance company.