It pays out on the death of the insured and also guarantees a payout in 10 to 20 years. The College Plan, according to the complaint, is an endowment life insurance policy in disguise, not a college savings plan. The lawsuit claims that Gerber misrepresents the Grow-Up Plan because death insurance policies for children are unpopular. The cash value is allegedly less than the paid premiums for almost 40 years, and a buyer who misses a monthly payment risks losing everything. “Gerber Life’s guaranteed “cash values” or “nest eggs,” according to the complaint, “lock people into a loss for nearly 20 years.” Even then, before accounting for taxes and inflation, the complaint alleges, there is a net loss. If the child lives to age 21, then he or she can receive a payment. The lawsuit focuses on Gerber’s Grow-Up Plan and College Plan.īuyers of the Grow-Up Plan sign up for monthly bank account deductions, ranging from less than $5 to more than $100, to give children or grandchildren a head start or a nest egg.īut the plan, according to the complaint, is actually a life insurance policy that pays the parents or grandparents if the child dies. Though Gerber Life Insurance shares the “trusted logo of the wholesome smiling baby,” the complaint states, its products are “the financial equivalent of junk food.” The insurance company continues to use the Gerber baby logo, under a licensing agreement. in 2018, when their parent company, Nestlé, sold it to Western & Southern Finance Group of Cincinnati for $1.55 billion. But since 1967, Gerber has also sold insurance. Most consumers are probably more familiar with Gerber baby foods, accounting for more than 80% of sales in the U.S. “We disagree with the allegations and stand behind our products and services,” he stated in an email, and the company has a “long heritage of providing protection for families.” Marques said the company does not comment on the specifics of pending litigation. “Gerber Life has convinced hundreds of thousands of well-meaning but unsophisticated parents and grandparents to pour their often meager savings into risky plans that provide little if any value,” the complaint states, “putting all their eggs into the wrong basket.” Josephine Loguidice, an Ocala, Florida woman who signed up for Gerber plans for seven grandchildren, filed a class action lawsuit against the White Plains company April 24 in U.S. Gerber Life Insurance Co., whose products are associated with the trusted baby food brand and memorable baby face logo, has been accused of marketing plans for building nest eggs for children that actually lock in financial losses.
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