As college costs are expected to continue climbing, let an insurance professional help you plan for your child's education expenses. Life insurance can be vital in helping you save college funds for your children. Whether you're there or not.
Saving college funds for children
Life insurance offers certain tax advantages. In the event of your death, your family can choose to use the income tax-free death benefit to pay education costs. And with some types of life insurance, you can take loans against your policy without tax penalties.1
Be sure to take into account these additional features when planning for your kids’ college funds, available with certain types of life insurance:
- Guaranteed cash value, so you know a certain amount of money is available
- Access to your money, so you can use it for tuition and other educational expenses
- Market participation, so your policy’s value has the potential to grow based on the performance of investments in your policy
Term vs. permanent insurance
If you simply need to pay for your child's college expenses in the event of your unexpected death, consider term life insurance. Just choose the length of time you need coverage and the amount of death benefit you need.
With permanent life insurance, you may be able to take withdrawals or loans against your policy's cash value, which can continue to grow tax-deferred. This may be an option if you've maximized your 529 plan, which also offers tax-deferred growth and tax-free withdrawals for higher education expenses. Talk with your financial advisor about how you may be able to use permanent life insurance to help with college expenses.