Can Life Insurance Secure Your Children’s College Education?
Granting access to highest form of education must be a top priority for any responsible parent. But education does not come cheap and attending the classes of a prestigious university requires a very expensive tuition. Parents are well aware of that and they begin preparations since the child is very young.
Choosing the right savings plan is crucial and will heavily influence the capacity of your child to attend classes. Besides governmental plans, life insurance can secure your children college education. Read more about whole or term life insurance rates and benefits, if you want to know how these policies can help you save college money.
The majority of parents prefer the famous Section 529 college savings plans. But they are not aware that this program is very inflexible and has strict limitations.
Money saved with 529 can be used only for “qualified education expenses”. This means that if your child drops out of school or he decides to change college to a one that is not credited, the money will not be used to pay for the new accommodations and fees. The good news is that you will be able to name another beneficiary (if you have another child who will attend or attends college) or you can retreat the money (some expenses and taxes will be subtracted)
Life insurance policies offer all the flexibility you need. Since it is your money, you can spend it as you wish. If you are using life insurance, you can get college funds as a loan against the policy.
If you take money as a loan to pay college debts, this will not reduce the financial aid, but will affect the death benefit. Contact a life insurance broker and ask more about using life insurance as a college money savings vehicle.
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