Gerber Life Insurance Company Review

About Gerber Life.

Based in New York, Gerber Life Insurance Company has been issuing life insurance policies since 1967.  Although Gerber Life was indeed founded by the well-known baby food manufacturer, the company is now part of the Western & Southern Financial Group and pays Nestle (the current owner of Gerber Products) for the right to use Gerber-related intellectual property in its marketing.

Even under its current ownership, Gerber Life continues to promote a family and child-friendly orientation and is probably best known for its life insurance policies for children.  Gerber Life does, though, write policies for most ages, including final-expense coverage for seniors.

Gerber Life’s marketing materials focus on providing affordable life insurance for all family members—and on the ease with which new applicants can obtain coverage.  Gerber Life sells its policies directly to the public—typically without the involvement of any local insurance agents.  Quotes can be obtained fairly easily on Gerber Life’s website.

Gerber Life Financial Ratings.

A.M. Best:                  A
Fitch:                           NR
Moody’s:                     NR
S&P Global:                NR
Comdex Ranking:       NR

Gerber Life has held an A rating from A.M. Best, the third-highest score available, for 17 consecutive years.  The consistently strong score means that, in general, Gerber Life is financially stable and secure, with little risk of being unable to meet its policy obligations.  The company has around $50 billion in life insurance policies currently in force.

Gerber Life is not accredited by the Better Business Bureau but does presently have an A+ rating with BBB.  Although BBB’s website does show several consumer complaints, the National Association of Insurance Commissioners reports that, compared to other similarly sized companies, Gerber receives fewer than average complaints.

Products Offered by Gerber Life:

• Whole Life Insurance for Children
• Term Life
• Whole Life
• Final Expense Insurance
• Accidental Death & Dismemberment Insurance

Life Insurance Policies Offered by Gerber Life.

Gerber Grow-Up Plan:  Gerber’s most well-known policy is its whole life policy for children.  Gerber Grow-Up policies are available for kids starting at two weeks and continuing through age 14, with available coverage limits ranging from $5,000 to $50,000.  A parent, grandparent, or legal guardian must apply on the insured child’s behalf.

When a child insured under a Gerber Grow-Up policy reaches age 18, the coverage amount is doubled.  Then, at 21, the insured former child takes over legal ownership of the policy and has a contractual right to purchase supplemental coverage with no additional underwriting.  Thus, the Grow-Up Plan allows a child to lock in a lifetime of fixed-premium whole life coverage at low premium rates.  And, because the policies accrue cash value that earns interest, they can also serve as a long-term savings vehicle.  A similar policy called the Gerber Young Adult Plan is available for teenagers and has most of the same features, but the premiums are predictably higher.

Gerber Life College Plan:  Gerber’s College Plan policy acts like whole life insurance—with fixed premiums and predictable cash-value accrual—but is technically an endowment contract with a defined maturity date. It’s designed to work as a hybrid of life insurance and a college savings vehicle.  A parent is the “insured” under a policy with coverage of $10,000 to $150,000 and a term of usually around 20 years.  If the parent dies during the term, the policy pays out its death benefit.  If not, at the end of the term the mature policy pays out its face value.  The idea is that, either way, policy proceeds will be available to pay for the education of the insured’s child.  Notably, though, Gerber’s College Plan differs from 529 college savings plans in that there is no requirement that funds actually be put toward education expenses.

Term Life:   Gerber offers term coverage ranging from $100,000 to $300,000 in initial terms of 10, 20, or 30 years.  Most policies are simplified issue, requiring only a health-screening questionnaire but not a medical exam.  However, medical exams are necessary for new applicants age 51 or over who request higher coverage amounts.  Gerber’s term life policies come with a conversion option allowing policyholders to convert coverage to whole life by an identified date.  And there is also a right to renew coverage at the end of a policy’s initial term until the insured reaches age 65.  Premiums are fixed during a policy’s initial term, but renewals are subject to premium increases.

Whole Life:  Whole life policies are available from Gerber for new applicants between ages 18 and 70 in coverage amounts ranging from $50,000 to $300,000.  Most policies are simplified issue, requiring only a health-screening questionnaire but not a medical exam.  However, medical exams are required for new applicants age 51 or over and who request coverage amounts above $100,000.  Gerber’s whole life offering is a fairly traditional whole life policy—with the fixed-premiums, lifetime coverage, and steady tax-deferred cash value growth that have made whole life a reliable financial product for many years.  Cash value can be accessed via policy loans, which accrue interest at 8.00%.

Guaranteed Life Insurance (Final Expense Insurance):  Gerber’s final expense offering is a guaranteed-issue whole life policy available to applicants from 50 to 80.  Coverage amounts are available as low as $5,000 and as high as $25,000.  As guaranteed-issue coverage, no health screening is required, and all applicants within the policy’s age range are accepted.  Gerber’s final expense policies include a two-year waiting period.  If the insured dies during the two years after a policy is issued and death did not result from a qualifying accident, policy proceeds are equal to the total of all premiums paid to date, plus ten percent.

Available Life Insurance Riders.

Disability Rider:  In the event the insured becomes totally disabled lasting at least six months, the premium obligation is waived during the period of disability.

Payment Protection Rider: The Payment Protection Rider comes standard with children’s policies.  If the adult policyholder dies or becomes totally disabled prior to the insured child’s 21^st birthday, premium obligations are waived until the child reaches age 21.