Gerber Life’s “Grow Up Plan” Under Scrutiny: What Las Vegas Parents Need to Know
A Las Vegas family’s dream of college savings has turned into a nightmare, highlighting a widespread misunderstanding surrounding Gerber Life’s popular “Grow Up Plan.” Many parents and grandparents, hoping to secure their children’s educational future, are discovering these policies aren’t quite what they expected. This issue has sparked class-action lawsuits and left families like one here in Southern Nevada facing significant financial stress.
The “Grow Up Plan” Controversy
According to Bankrate, Gerber Life sold nearly two million new “Grow Up Plan” policies last year, with many buyers believing they were investing in a college savings fund for their children. The plan is widely marketed as a way to put aside money, often with promises of benefits like the policy value doubling at age 18 while premiums remain the same.
A Local Mom’s Heartbreaking Story
Karina, a Las Vegas mother, is one of those who felt misled. She signed up for the “Grow Up Plan” in 2009, expecting her investment to double and provide a $50,000 safety net for her daughter, Selma, when she turned 18. Selma, an 18-year-old with a passion for Japanese culture, dreamed of attending the University of Tokyo.
Karina meticulously made her payments for years, often prioritizing the Gerber Life policy over rent or car payments, believing she was securing Selma’s future. However, when Selma turned 18, Karina discovered the policy did not work as she understood. Instead of a direct payout for college tuition, she found herself in a distressing situation, realizing her daughter’s international college dreams were now on hold.
Understanding the Policy’s Reality
FOX5 Investigates confirmed what many parents like Karina are learning the hard way: the “Grow Up Plan” is primarily a whole life insurance policy. While the policy literature mentions “coverage doubles automatically at age 18” and “cash value that builds over time,” a consumer attorney explained that the advertised benefits typically only pay out upon the child’s death. The “cash value” can be borrowed against or the policy can be surrendered, but it’s not a straightforward college fund that matures with a direct payout.
Gerber’s website now clarifies that the money is available to “borrow against” or that an adult child can “turn in the policy and receive the available cash value”—terms that differ significantly from a simple savings account.
| Feature | Parent Expectation | Policy Reality |
|---|---|---|
| Payout at Age 18 | Direct lump sum for college | Coverage doubles (insurance payout upon death); cash value can be borrowed or surrendered |
| Primary Purpose | Dedicated college savings fund | Whole life insurance policy with a cash value component |
| Accessing Funds | Easy cash out for education | Borrow against cash value (incurring interest) or surrender the policy, often for less than expected |
Class Action Lawsuits and Local Complaints
Karina’s experience is not isolated. Gerber Life’s “Grow Up Plan” and its “College Savings Plan” are currently facing two class-action lawsuits. One suit, filed in Indiana, alleges that nearly two million consumers were “intentionally misled by deceptive marketing practices.”
Locally, the Nevada Division of Insurance has received six complaints regarding Gerber Life plans. Several additional complaints are also visible on the Better Business Bureau website, indicating a broader pattern of misunderstanding among policyholders.
Gerber Life’s Official Stance
When FOX5 Investigates reached out for comment, Gerber Life Insurance Company declined an on-camera interview but provided a statement. They affirmed that they treat all complaints with “utmost seriousness,” conducting thorough investigations and striving for a positive customer experience. However, due to pending litigation, they stated they could not comment on specifics, concluding by saying they “proudly stand behind our products and services.”
What This Means for Las Vegas Families
The ongoing legal battles mean that families like Karina’s will have to wait for a resolution. In the meantime, Selma’s dream of attending the University of Tokyo is deferred as she plans to take a gap year to save money. This situation serves as a stark reminder for all Las Vegas families to meticulously review the terms and conditions of any financial product, especially those marketed for significant life events like college education.
Frequently Asked Questions
- What is the Gerber Life “Grow Up Plan”?
It’s a whole life insurance policy for children, designed to build cash value over time and provide lifelong coverage. While it does build cash value, it is not a dedicated college savings account that pays out directly for tuition. - Why are there class-action lawsuits against Gerber Life?
Lawsuits allege that Gerber Life intentionally misled consumers through deceptive marketing practices, making them believe the “Grow Up Plan” was a direct college savings fund that would provide a significant payout when the child turned 18. - How does this affect Las Vegas residents?
Several complaints from Nevada residents have been filed with the Nevada Division of Insurance, indicating that local families have also experienced similar misunderstandings regarding their policies. - What should I do if I have a Gerber Life “Grow Up Plan”?
Carefully review your policy documents to understand the terms, conditions, and how the cash value truly functions. If you believe you were misled, you may wish to contact consumer attorneys specializing in class-action lawsuits or file a complaint with the Nevada Division of Insurance or the Better Business Bureau.
Always read the fine print and seek independent financial advice to ensure that any plan you invest in truly aligns with your family’s financial goals and expectations.
Gerber Life Grow Up Plan Not College Savings
