Life Insurance can Protect your Family and Help Pay Future College Costs
It’s never too early to start planning for how you’ll pay for your child’s college expenses and to start saving. Life insurance is one option to consider. With the right life insurance policy, you can secure needed death benefit protection while also gaining a way to help pay for college.Benefits of using cash value life insurance:
- Access the policy’s cash value through loans and withdrawals* to help pay for college expenses
- Death benefit can provide college funds in case of premature death
- Not included in FAFSA – no affect on financial aid
- Doesn’t lose value if market goes down
- Can be used for anything – not just college
It’s important to carefully weigh all of the advantages and disadvantages of the options you’re considering. While some may look more beneficial than others at first glance, that’s not necessarily the case when it’s time to pay taxes or determine financial aid eligibility.
*Tax law permits a policy owner to withdraw life insurance policy cash values up to the policy owner’s basis or investment in the contract without income tax consequences. Withdrawals and loans will reduce the available death benefit. Withdrawals beyond basis may be taxable income. Excess and unpaid loans will reduce policy value and may cause the policy to lapse. If a policy lapses, unpaid loans are treated as distributions for tax purposes. For more information about the tax results of life insurance, consult your attorney or tax advisor.