Did you ever think to use a life insurance to help pay for college tuition? A permanent life insurance policy, purchased when a child is young does build cash value that can be used for college.
Parents can consider life insurance as an investment tool in preparing to fund their child’s college expenses.
Don’t Waste the Cash Value in Your Permanent Policy
Life insurance is a must for a family’s financial well-being. She notes that any person who has people depending on him or her for income, would be blind-sided if the income should suddenly stop. Life insurance is coverage to make sure this scenario never happens to your family.
The cash value in whole life insurance is something under-utilized by consumers. Over time, a whole life insurance policy builds up a reserve of money called its cash value. The policyholder is free to borrow against or withdraw this money, for any reason, at any time. People need to know what they have in this multi-beneficial product of whole life insurance.
If a policyholder passes away without ever dipping into the cash value of the permanent life insurance policy. The death benefit gets paid to the beneficiary, as planned. However, all that money sitting in the cash value reserve, if not used before the policyholder passes away, goes back to the insurance company. Some people aren’t even aware that this happened and an investment avenue was wasted.
When Should You Start Saving for College Expenses?
In order to start saving for anything at all, you should take a step back and analyze your present financial state. Do you have any debts, add them up. What is your monthly money intake and outtake. Is there anything left over after your bills are paid? What disposable income do you expect each pay period, and how much goes into an emergency savings account?
Record an entry for each money transfer you experience within a specified timeframe and see what you actually are spending your money on. Many people will realize that more money than maybe it should had been spent on things that were not really needed.
Insurance Experts Agree Life Insurance Is Key
Life insurance proceeds can be utilized as an investment tool to help pay for college, according to Edward E. Graves, author of “McGill’s Life Insurance.” Graves adds, disabled children who face special educational needs, can expect even higher costs for college.
Average Annual College Costs on the Rise
In 2016, the average annual cost for undergraduates was $20,090 at state 4-year institutions. The cost for private 4-year institutions was even more at $45,370, according to the CollegeBoard.org.
It’s also worth noting the costs of college are continually on the rise. The cash value in a whole life insurance policy, or a death payout, can help pay for college and alleviate financial burdens. Life insurance can be an investment tool in your strategy for college funding.
— The American College (@TheAmerCol) June 26, 2017