- How life insurance can fund child’s college education
- March 25, 2014
With the rising costs of education, parents and future parents are taking more precautionary steps to pay for their child’s education. Securing a life insurance policy while young is an effective way to do so.
Life insurance proceeds can help provide the cash needed to fund educational goals, according to Edward E. Graves, author of “McGill’s Life Insurance.”
If private schools, higher education or disabled children who face special educational needs are in the picture, you can expect even higher costs for tuition.
In 2013, the average annual price for undergraduate tuition, fees, room and board was $16,789 at public 4-year institutions and $37,906 at private 4-year institutions, according to the National Center for Education.
It is worth noting these numbers are on the rise.
But, what if your surviving spouse wants to pursue education or training on a part-time basis? The length and costs of their education may increase if they are working at the same time.
The key, according to Marc Belletsky, spokesperson for The Hartford, is to start saving as early as possible and not underestimate the future cost of college.
“The more expensive the school, the higher the rate of inflation for the future,” Belletsky said. “It’s important to consider life insurance as a way to fund your child’s education because death interrupts any plan you may have had to build up savings.”
Additionally, Belletsky suggests whole or universal life as another excellent way to save for your child’s tuition.
“These policies have a cash value component that allows you to build up savings and access the account while you’re still alive,” Belletsky said.
Life insurance proceeds from a death benefit or a trust can help alleviate these financial burdens, if the worst should happen.
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