My Mother-in-Law Wants to Save for Our Kids’ Futures. The Way She Wants to Do It Sounds Like a Scam.

Pay Dirt is Slate’s money advice column. Have a question? Send it to Kristin and Ilyce here. (It’s anonymous!)

Dear Pay Dirt,

My mother-in-law just sent my husband and I several emails about buying life insurance for our very young children (ages 2 and 4) with a lot of data and very little explanation. There are two different kinds she’s suggesting: whole life insurance and universal life insurance. I don’t understand the difference between them. But is life insurance for kids ever a good idea?

I admittedly know next to nothing about this. After a quick internet search, I don’t know why she or anyone else would want to do this. We already have three different investment accounts open for them: 529s, brokerage accounts (UTMAs), and now Trump Accounts (which work like IRAs). Why not just gift them money and invest in one of those accounts? I don’t think she’s at risk of going over the gift limits.

Honestly, she does this about once a year where she wants to talk about how she wants to give money to our kids and invest in their futures, but she rarely follows through (I can only think of one example off the top of my head). I don’t want to discourage her from giving to our children, but I don’t want her to waste her money or our time. And I don’t want to sign our kids up for future payments. That’s not a gift.

Please forgive me if I sound ungrateful. We are not relying on anyone else to support our children. Generosity and gifts are always appreciated. Quality time even more so. She has so many lovely qualities, but after a while these discussions have assumed a performative quality. I’m very mindful about choosing my words carefully with her as to not offend or upset her. Why is this so complicated? I think it’s a scam.

—Kid Savings

Dear Kid Savings,

I’m not a huge fan of either whole life or universal life insurance, which are forms of permanent life insurance. Here’s the difference between the two: whole life has fixed premiums and a cash value the insurer controls, while accumulation variable universal life has flexible premiums and a cash value invested in market-based sub-accounts, like mutual funds, so it can lose money. The “accumulation” concept is pitched to kids as a tax-deferred savings or retirement vehicle with a little insurance attached. These insurance policies are not a scam, but they carry plenty of fees and are a commission-based product—and that commission makes these policies extremely expensive.

There are a lot of different types of insurance coverage out there, and you could easily go broke buying insurance policies, so I always recommend just buying the coverage you need. Term life is what most people need, and you buy it when you need to replace income and support your loved ones after you’re gone. Your 2- and 4-year-old have no dependents (they depend on you!) and no income to replace. They don’t need life insurance of any kind at this point, and you’re right not to set them up with expensive policies that have ongoing costs.

What they will need is a way to pay for their big future expenses: college or graduate school (that’s your 529 college savings plans); a car to get to their first job, first and last months’ rent or a down payment (that’s the Uniform Transfers to Minors Act or UTMA account); and their retirement (Trump accounts are modeled on IRAs). You’ve found the most cost-efficient ways to save and six accounts (three for each) is plenty of financial accounts to keep track of for your two kids.

What does your husband say about these conversations? The two of you should discuss how to handle the next time your mother-in-law brings up one of her great ideas. I’d suggest having your husband thank his mother for wanting to invest in her grandchildren’s future. He can calmly redirect her back to these three options and ask her to choose her favorite.

Dear Pay Dirt,

I am financially drowning. I’m a young recent college grad in an expensive city, which I have no choice but to stay in due to my extensive health needs. I have $13,000 in credit card debt across two cards from my last year of college, spent almost exclusively on rent and basic needs like groceries during my full-time unpaid internship. I also have $20,000 in student loans which have recently started to come due, but I have not been paying them. I have a bachelor’s degree and certifications in my field (education) which is highly in demand and would pay about $25 hourly, but I have not been able to find a single school willing to hire a teacher in a wheelchair, despite my skills and experience. I rent a tiny bedroom in the cheapest semi-accessible apartment I could find, but this is still just over $1,000 before utilities. Right now I work part-time for minimum wage ($15 here), a 2-hour commute each way on public transit. I cannot get enough hours to cover my entire rent and have to rely on my father (who is also disabled/ in debt) to help me with the last $200-$300 every month, not a sustainable back-up.

I’m still looking for work in my field, but frankly even at less than 20 hours a week my health can’t keep up, so I don’t know how feasible full-time work would be, and certainly couldn’t manage a second part-time job. But Social Security is almost impossible to receive at my age, and would leave me no way to make enough to pay my debt. I pick up research studies whenever I can but they don’t pay much either. I rely on state assistance for food and ration everything I can, so my only regular expenses are rent/utilities, credit minimums, and cat litter. Currently all of my credit debt is interest-free, but both of those periods are ending over the next few months and I have no way to pay the crushing interest. So far my plan has been to manage these with interest-free balance transfers, for a fee that would only amount to two months of the coming interest, but this plan requires me to actually have a way to pay it back by next year and still adds to my debt with fees. My credit is still in decent shape (about 700), so I’m scared to sacrifice that with some kind of debt consolidation plan. I’m familiar with Total and Permanent Disability (TPD) discharge for the loans, but unsure if I would qualify if I do eventually manage to secure and sustain full-time work. How on earth do I even start to manage all this debt with such limited tools to pay it back, no other expenses I can cut down on, and without completely destroying my credit, which has thus far provided my only lifelines?
—Crippled With Debt

Dear Crippled with Debt,

First, it seems to me you’re doing everything you can to launch yourself into the working world. And, you’re doing it while maintaining a 700 credit score! Good on you.

Let’s start with your student loans. Call your servicer and ask about Income-Driven Repayment (IDR). At your income level, an income-based repayment plan could bring your payment to $0, and those months still count toward forgiveness. The new Repayment Assistance Plan (RAP) has a $10 monthly minimum, so compare the two on StudentAid.gov before choosing.

According to StudentAid.gov, a Total and Permanent Disability (TPD) Discharge cancels your federal student loans and TEACH Grant service obligations if you cannot work due to a severe, permanent disability or chronic health condition. That doesn’t sound like you right now. It’s worth a call to confirm, but you’re actively looking for work and taking any job you can.

But don’t rule out Social Security benefits until you call your local office. If your father receives Social Security retirement or disability benefits and your disability began before 22, you may qualify for childhood disability benefits on his work record. Also contact your state’s vocational rehabilitation agency, which helps people with disabilities find work and sometimes pays for training or equipment. In some states, it even helps with transportation.

Your 0 percent credit card swap is a good idea, but when the music stops, you’ll have even more trouble. So, contact the National Foundation for Credit Counseling (NFCC) and talk to someone about where you’re at and what options you have. Going into a Debt Management Program (DMP) will lower your credit score significantly and it may take years to recover. That will matter if you need to rent another apartment.

It’s outrageous that you can’t find a job in a time when there’s a shortage of teachers. Have you thought about tutoring online, finding a job with remote work opportunities in a related field, or even a remote admin job that pays more and provides full benefits?

I hesitate to put one more thing on your plate, but given the trouble you’re having getting hired as a teacher in a wheelchair, it might be worth an initial consultation with a disability rights attorney. Many offer free consultations, and the EEOC takes discrimination complaints at no cost (watch the filing deadlines).

Don’t give up. You’ve got options. Please write back and let me know how it’s going.

—Ilyce

Classic Prudie

I just moved in with my boyfriend of eight months. This is quicker than I’d normally move in with someone, but I had problems with an awful landlord, and my boyfriend had just bought a house. Things have been going really well, except for one issue.