Many people are surprised to learn that they can use life insurance to pay for college. It is the cash value accumulation feature of indexed universal life insurance that makes it a tool for funding your children’s college education.
When funded properly, an IUL policy can build up enough cash to help pay the cost of college for your children and grandchildren. Using life insurance for college savings simply makes a lot of sense.
Most NRI families are worried about kids’ college education and save much of their household income for their children’s college education during their prime years of earning. Additionally, since the income range of NRIs is higher, we often believe that it’s impossible to get financial support for our children’s college.
This heavy emphasis on higher education, however, leads to NRIs prioritizing saving for their children over saving for themselves. As a result, 1/4th of NRIs struggle between saving to pay for their children’s college education and saving for their own retirement.
Despite such solid financial planning, only about 1/3 of people are satisfied with their current financial situation, and one-third of the aforementioned group are worried about being able to meet their long-term financial goal.
It is possible to get maximum benefit by starting an indexed universal life insurance policy early to protect your family in the event of the death of a spouse. This same life insurance policy can also be used to help cover the cost of higher education. You are simply buying life insurance to pay for college. Wwe recommend that families invest in life insurance for college savings so that two risks can be mitigated with one investment product.
Again, starting early is key to any savings goal that you might have. “Accumulation of funds inside an indexed UL product for college or other major costs is a long-term strategy.”
When the kids are young many of us think of a 529 plan for college. This is great, but there are limitations. Many times, we suggest that indexed universal life be considered to help in the college planning process.
Death benefit protection, diversification, annual reset, and tax-deferred growth are the 4 key features of indexed universal life for college planning that make planning for college using indexed universal life insurance a winner.