Have you ever considered using life insurance to help pay your for college? When a child is young, a permanent life insurance policy accumulates cash value that can be used for college.
When preparing to fund their child’s college expenses, parents can consider life insurance as an investment tool.
Don’t Waste the Cash Value in Your Permanent Policy
Life insurance is essential for a family’s financial security. She observes that anyone who has people relying on him or her for income would be caught off guard if the income suddenly stopped. Life insurance protects your family in the event that this scenario occurs.
Consumers do not take advantage of the cash value of whole life insurance. A whole life insurance policy accumulates a monetary reserve known as cash value over time. The policyholder is free to borrow against or withdraw this money at any time for any reason. People must understand what they have in this multi-beneficial product known as whole life insurance.
If a policyholder dies without ever using the cash value of his or her permanent life insurance policy. The beneficiary receives the death benefit as planned. However, if the money in the cash value reserve is not used before the policyholder dies, it is returned to the insurance company. Some people are unaware that this occurred, and an investment opportunity was squandered.
When Should You Begin Saving for College?
Before you begin saving for anything, you should take a step back and assess your current financial situation. If you have any debts, total them. What is your monthly monetary intake and expenditure? Is there anything left over after you’ve paid your bills? What is your expected disposable income each pay period, and how much goes into an emergency savings account?
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Life Insurance Is Essential, According To Insurance Experts
According to Edward E. Graves, author of “McGill’s Life Insurance,” life insurance proceeds can be used as an investment tool to help pay for college. Graves adds that disabled children with special educational needs can expect even higher college costs.
The Average Annual Cost Of Attending College Is Rising
In 2016, the average annual cost for undergraduates at state 4-year institutions was $20,090. According to CollegeBoard.org, the cost for private four-year institutions was even higher, at $45,370.
It’s also worth noting that college costs are constantly rising. A whole life insurance policy’s cash value, or death payout, can help pay for college and relieve financial burdens. Life insurance can be an investment tool in your college funding strategy.