Details of the Life Insurance Policy I Bought on My Daughter’s Life

by Evan

In my last post, I explained why I actually bought a permanent whole life insurance policy on my second child’s life, so I figured I would share the actual details of the policy itself.  If you didn’t read the last post, there are two main reasons why I purchased whole life insurance on both of my children (fuller details in the post):

  1. I am not going to work if something happens to either child and
  2. Guaranteed Insurability – I have created a policy whose death benefit can increase without medical underwriting

My Child’s Life Insurance Policy

The basics:

  • Approximately $50 a month for a current death benefit of about $132,000.
  • A permanent product rather than a term policy because the term would not allow the “not so basic” explanation to occur

I hope to God I never see that $132,000, but if something were to happen to my daughter, that is enough money to allow me to grieve in a way that I see fit (i.e. not rushing back to my desk because I have to earn my next mortgage payment).

The not so basic:

  • I included a rider that says if my daughter is ever disabled she/I do not have to pay the premium, yet the policy continues to grow normally
  • I included a rider that guarantees that she can increase her death benefit from $132,000 to $1,132,000 without medical underwriting

Growth on my Child’s Life Insurance Policy

If you were to decide to look into this type of protection, I would recommend looking at some of the larger mutual insurance companies.  Remember, hopefully this policy doesn’t pay out for 90+ Years! I want to make sure the company is likely not only to be around, but financially strong.  Some of the larger mutual companies have been around for 150+ Years (MassMutual started in 1851, Guardian started in 1860, etc.) – one can hope they’ll be around in another 100 or so.  I don’t think there is value in naming the company I used as I wouldn’t want to sway anyone other than to actually think about the financial move.

Cash Value Growth

YearCumulative OutlayCash Surrender ValueInternal Rate of Return


Death Benefit Growth

YearCumulative OutlayDeath Benefit


First, the above numbers are not guaranteed.  But that is okay the market isn’t guaranteed either.   So, in a fantastic world, Daughter hits the age of 30 and has a family or business (or whatever else makes her happy) and I hand her a policy where she can increase the death benefit without a medical exam, with cash value of $25K (so assuming inflation cuts the value in half I’d still take a $12,500 asset from my parents) and I bought a terrible CD/Bond with an IRR of 2%+ tax deferred. Worst case scenario something happens very early on, and for about the price of a monthly cell phone bill I can spend as much time as I need with my wife and son.  This is obviously a HORRENDOUS scenario, but one where I can offload some of the financial risk (obviously not the emotional one).


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