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Gerber Life banks on two things to sell their insurance policies – a well-known trusted name and a cute baby. <ahref=”https://www.expertinsurancereviews.com/life-insurance/”>Life insurance and college savings products sold by a company that manufactures baby food may sound disconnected. However, Gerber’s Grow-Up Plan – their best known product – is a popular choice for parents who have already gained trust in the brand. In addition, their College Life plan may appeal to those looking to secure money for college without risky investments.
How well the Gerber Grow-Up Plan and College Plan live up to their promises are a big part of the overall picture, but there are also a few other insurance products from Gerber worth looking into. Additionally, we will look at Gerber Life’s reputation as an insurance company, and what kind of value their products offer in the long run.
Gerber Life Overview
Gerber is one of the best-known companies in America, with a wholesome image that dates back to 1927. Daniel Frank Gerber, who owned a canning company, founded Gerber in Fremont, Michigan when he started marketing his wife’s homemade baby food. Within a year, the company’s products were being sold nationwide and eventually around the world. Today, Gerber has a majority hold on the baby food market in the United States.
Gerber Life Insurance Company was created as a subsidiary of Gerber Products Company in 1967. The company was created for direct-marketing life insurance sales to parents, providing life insurance policies for children and adults alike. Gerber Life Insurance operates independently from the baby food side of the company. However, the entire Gerber company, including Gerber Life, was acquired by Nestle in 2007 in a multi-billion dollar deal, making it part of an enormous powerhouse in the food industry.
Gerber Life writes insurance through all 50 states, Puerto Rico, and Canada. Their Grow-Up Plan and College Life plans are their best-known products. The College Life plan is advertised with a promise to help parents save for college with a low-risk method. This promise has made Gerber Life one of the biggest direct-marketing life insurance companies in the U.S.
Not only the Grow-Up plan, but all of Gerber’s life insurance products are marketed as providing for the financial future of children. The products were created for parents who are concerned about the high cost of college, as well as providing for their children in the event of their deaths. While many other companies sell juvenile life insurance, Gerber is probably the most recognizable brand for the product.
Gerber Life’s headquarters remain in Fremont, Michigan, with an additional headquarters for the Canadian division in Toronto, Ontario.
Policies are sold directly, so there is no agent as a middleman. Online quoting and applications are available through a simple and straightforward system.
Gerber’s life insurance products are available not just for children, but for adults as well. Their juvenile products are definitely the company’s bread and butter, with their Grow-Up Plan probably being the best-known juvenile life insurance option on the market. Gerber also has a toe in the health insurance market with an accident insurance plan.
Gerber’s flagship plan, this is a whole life insurance plan designed to allow parents to purchase life insurance for a child with lifelong coverage at the same low premium.
Because children can obtain coverage easily and at very low rates, the Grow-Up Plan ensures the child will have coverage into adulthood without the higher premiums. It also ensures coverage even if the child is later diagnosed with a condition that might make getting life insurance difficult.
The Grow-Up Plan can be purchased for children between 14 days and 14 years old. At 18 years old, the coverage automatically doubles (if you had a $30,000 policy, it will now be a $60,000 policy) with no premium increase, and at 21 the child takes over the policy, which continues for as long as the premiums are being paid. There’s also an option to increase the coverage at this point, although coverage increases do mean paying higher premiums, as they will be charged at standard rates.
The Grow-Up Plan also comes with a cash accumulation account that allows extra benefits to grow over time. It is designed to eventually equal the amount paid in premiums, and can be borrowed against.
Coverage is available from $5,000 to $50,000, which means that when the policy doubles at 18, the maximum coverage under the original policy would be $100,000.
Gerber Life College Plan
Known as an endowment life policy, the Gerber College plan is a life insurance policy that doubles as a college savings fund – or really as a savings fund for anything, since there’s no requirement that it be used for college. This policy is marketed as the only college savings plan that also provides life insurance, and it’s pretty unique in the insurance industry.
The plan allows parents to choose a monthly premium amount, which won’t increase over time, and to select a maturity date for the policy, which can be between 10 and 20 years.
The plan will pay out either at the maturity date or upon the death of the policyholder, making it something of a term policy with a guaranteed payout. Gerber promises a payout of between $10,000 and $150,000, as long as premiums are paid. The amount of the payout depends on how much the parent decides to pay each month. Gerber states that the premiums will be invested carefully with low risk, this allows them to guarantee the policy payout.
Although this plan is advertised as a college savings plan, it doesn’t have the tax benefits that come with a plan like a 529. The payout from the plan will be taxed, and premiums are not tax-deductible. As a result, parents will lose some of the policy payout to taxes.
Since the policy pays out on the death of the policyholder, it also doubles as an adult life insurance plan that can help provide some security for the child in the event of a parent (or whoever started the policy) passing away.
The plan’s appeal is obvious; simple, low-cost, and low-risk. All of which are likely to seem attractive to many parents. However, most financial experts don’t recommend this policy as a solid college savings choice, and the internet is full of articles explaining why, such as this one from Business Insider. These articles tend to point to the issue mentioned above – the lack of tax protection for the money, along with some other issues that make a regular college savings plan and separate life insurance plan generally a better value.
Gerber offers term life insurance for adults that functions much the same as most term policies. The coverage is in place for a certain period of time, and then the policy expires.
One option on the Gerber term life policy is what is often known as a “simple” policy; it requires no medical exams and is easy to get for customers aged 18-50. With this option, the maximum coverage is $100,000, which is close to the overall product maximum of $150,000.
Terms are available from 10 to 30 years, and Gerber guarantees the premium for the duration of the policy.
Gerber’s whole life plan is a basic permanent life insurance product that provides lifelong coverage at a locked-in rate. The plan also includes a cash accumulation account that can be used to obtain a loan if needed.
Like the term plan, Gerber offers a simple version of the whole life policy that provides coverage up to $100,000 with no medical exam (for those who fit the same age parameters.) Again, the top limit of coverage is a total of $150,000.
Guaranteed Life Insurance Plan
This is a whole life plan that is aimed at people aged 50-80. This product can be thought of as a final expenses plan – the coverage offered is from $5000 to $20,000, and was developed to help loved ones pay for funeral and other expenses.
This plan is guaranteed in that those who fit the age group will be approved for the coverage without a medical exam, and regardless of health status. As a whole life plan, coverage lasts until the policyholder’s death, and it also includes a cash value accumulation account.
Gerber’s Accidental Death policy provides benefits for accidents resulting in disability or death.
The plan provides coverage from $20,000 up to $100,000. There is no medical exam and no health questions for applicants between the ages of 19 and 69; Gerber guarantees approval.
Gerber Grow-Up: A Closer Look at Juvenile Life
Since the Gerber Grow-Up Plan, which is a juvenile life insurance policy, is one of the most popular products sold by Gerber, and since juvenile life is often misunderstood – it’s worth taking a closer look at how they work, what value they offer, and how Gerber’s policies stack up.
A juvenile life insurance policy is simply a whole life insurance policy that insures the child, but is paid for and owned by the person who took it out – usually a parent or guardian – until the age of 21. Once the child is of age, they become the policy owner, and policy stays in force as long as they pay the premiums. Whether the now-adult child pays or the parent continues to pay is up to the individual.
The main benefits of a juvenile life insurance product are a locked-in premium and the certainty of coverage for as long as the premiums are paid, regardless of changes in health status.
The Gerber plan adds an additional benefit, which states that the policy amount will double when the child turns 18, so that the insured is now paying the same amount for twice the coverage. We’ll take a look at how that works out premium-wise in the next section.
There is also a cash accumulation account, which can be borrowed against – with interest – if needed. Gerber promises that after 25 years, the cash value of the policy will be equal to or greater than the total amount of premiums paid over that timeframe.
There are a couple of things to consider before you buy a policy like Gerber Grow-Up.
If the child decides upon adulthood to pay the premiums, but wants additional coverage, they’ll pay for it at standard rates. Even then, Gerber only offers a maximum of $150,000, which won’t be enough as the now-grown-child begins to add dependents and assets over time.
In addition, life insurance is generally intended to cover things like lost income and debts when the insured passes away. Those things aren’t necessary upon the death of a child. Certainly the insurance payout can help to pay for final expenses and allow the family some time to grieve by covering lost wages. However, there are other ways to get that kind of coverage – such as a rider on a family life insurance policy – this option will cost less and provide more coverage overall. In general, juvenile life might not be the best use of your life insurance dollar.
Prices and Premiums
Gerber Life’s maximum coverage for a term life policy is $150,000, which is lower than our usual test rate policy.
Geber does provide instant quoting; all you have to do is enter your state and a few basics, and you’ll be given a list of premium amounts for various coverage amounts.
For example: In California, a 30-year-old non-smoker can get $150,000 worth of coverage on a 30-year term plan for $37.64/month.
A whole life policy for the same person would cost $130.50 per month.
These premiums are not terribly expensive on a monthly basis, but they provide significantly less coverage amounts compared to other policies with similar premiums (especially the term policy).
Since Gerber really pushes juvenile life insurance, we ran a quote on the Grow-Up Plan as well. For a 5-year-old boy at the maximum coverage level of $50,000, the monthly rate is $39.36. That coverage doubles to $100,000 at the age of 18 with no increase in premium.
A $100,000 whole life plan from Gerber for an 18-year-old male is quoted at $70 a month. Taking a look at these numbers, the Gerber Grow-Up Plan seems to offer an ok value in terms of whole life, giving the same amount of coverage for an 18-year-old male for half the price, and locking that price in for the rest of his life.
Interesting about these numbers is that for 13 years, the parents would have been paying $39.36 for only half that coverage – $50,000. Which works out to about the same price as the adult whole life prices at the age of 18 – when a $50,000 policy can be had for $37/month. What that means is that up until the doubling in value, the Grow-Up Plan rates are really about the same as an 18-year-old adults rates. It’s once the benefit doubles that the policy shows value.
That said, a rider on an adult policy to cover children would generally still cost less than this policy.
Geber does not have an online claims form, but this isn’t surprising for a life insurance company. There are two options for reporting claims:
- 1-800-628-0560 – Open 8 a.m. to 9 p.m ET. Monday through Friday an 8 a.m. through 5 p.m. on Saturdays
- Direct Mail:
Gerber Life Insurance Company
Claims Processing Unit
445 State Street
Fremont, MI 49412
Health Insurance claims can be filed through a different phone number at 1-866-846-9993. This office is only open Monday through Friday, 8 a.m. to 5 p.m.
They can also be filed by mail at:
Gerber Life Insurance Company
P.O. Box 25326
Overland Park, KS 66225-5326
Claims processing time varies, again not surprising for a life insurance company; life and health claims require different procedures and processes than auto or home claims.
This type of claim generally requires forms and other documentation, which can take a while to have processed. Gerber does promise to make the claims process as smooth as possible, and since life insurance claims are never filed under pleasant circumstances, that’s something any insurer should provide.
As to whether or not Gerber lives up to the promise, that’s something we will look at in the next section, when we take a look at the company’s reputation and reviews.
Company Ratings and Reviews
Gerber Life Insurance is not BBB accredited, but they do have an A+ rating.
There have been 69 complaints against the company in the past three years, with 30 of those – almost half – closed in the past 12 months.
Normally insurance companies focusing on life insurance don’t get as many complaints as auto and home insurance companies, so it raises a bit of concern to see more than a few.
There are a few other reviews of Gerber Life around the various review sites, but even fewer that offer any real information.
Beyond that, there are a few typical insurance company complaints, but they are so few that it’s hard to see any real cause for concern.
Gerber Life has a strong reputation with many years of life insurance experience. They offer a very simple way to get life insurance, with many options that don’t require a medical exam and fast approval. That makes their products appealing to many people. Their products, however, are lacking in a few areas.
First of all, their popular Grow-Up and College plans are of dubious value, and there are other solutions that are both a better investment and a better use of your insurance dollar. Gerber’s plans do have their merits, but those merits struggle to balance the scales in terms of value.
Gerber’s main life insurance plans max out at $150,000, which for many people won’t even come close to covering their life insurance needs. That amount is lowered to $100,000 if you want approval without a medical exam. In return for those benefits, the premiums are reasonable, but not so low as to make the policy an irresistible deal. Most people will be able to get a larger amount of coverage elsewhere and still pay a really reasonable rate. Particularly, when it comes to term life insurance – where most people aim for a higher death benefit to cover the shorter-term financial needs during a child’s youth.
Overall, Gerber’s products are limited and don’t bring enough value to make them a top choice for life insurance. Most life insurance customers will get more for their money and a bigger range of options elsewhere.
For a list of companies that we recommend, visit our Best Insurance Companies page.