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Gain Death Benefit Protection & Help with Tuition Costs

Achieve financial protection and help pay for the increasing costs of college tuition.
The primary purpose of life insurance is to provide a death benefit to beneficiaries. This benefit protection can make life insurance an attractive choice for creating a self-completing plan to help fund a college education.
While many people are aware that the cost of a college education has been on the rise, many underestimate just how large this cost has grown. According to the 2015 Trends in College Pricing published by The College Board, over the past decade, the published in-state tuition and fees for four-year public colleges and universities grew at an average rate of 2.9% per year beyond the rate of inflation. At the same time, many families lack life insurance protection, which many consider to be the cornerstone of financial protection. Recent studies show that four in ten U.S. households have no life insurance coverage at all, which leaves them vulnerable should the primary breadwinner die unexpectedly. What many people may not realize is that with the right life insurance policy, you can secure needed death benefit protection while gaining a way to help pay for college education.

 

Why life insurance?

Your personal savings should be the primary source for college funding. However, that comes with a challenge: if the family’s primary breadwinner dies prematurely, the personal savings plan typically comes to an abrupt end. In this situation, a life insurance policy can help. The policy’s death benefit could be used to help pay college tuition costs.
Another key benefit of permanent life insurance, is that it has the potential to accumulate cash value on a tax-deferred basis.1 Those funds can then be accessed while the insured is living to help pay for college costs.
Some of the advantages of a permanent life insurance policy include:
  • Parental stewardship. The policyowner has control of the policy’s potential accumulated cash value. Should plans change, the accumulated cash value can be used for other purposes without tax consequences.
  • Tax-deferred growth. Cash values within a life insurance policy generally grow tax-deferred.
  • Policy loan options. Different loan options are available to help you access the potential cash values within your policy.

Who can benefit?

There are a few items to consider before using life insurance for death benefit protection and a way to help pay for tuition costs:
  • Are you in need of life insurance protection to help ensure your family is financially protected?
  • Do you have a child or children up to 13 years old?
  • Are you concerned about college tuition costs?
  • Are you possibly looking to help supplement income in your retirement years?
It’s important to explore your options and to work with your life insurance representative to gain a clear picture of your needs. There are costs with life insurance. Permanent life insurance policies require monthly deductions to pay the policy’s charges and expenses, some of which will increase as you get older. These deductions may reduce the cash value of the policy.

How does it work?

After a thorough needs-based discussion with your life insurance representative, you select a life insurance policy that matches your needs. The basic steps typically include:
  • Purchase of a permanent life insurance policy. The policy provides death benefit protection and a way to help accumulate cash value on a taxdeferred basis.
  • If the unexpected happens and you die prematurely, the life insurance death benefit would be paid generally income tax-free to beneficiaries.
  • Alternatively, when it comes time for you to pay tuition costs, you may access the policy’s potential cash values through generally tax-free loans or withdrawals.
  • After helping to pay tuition costs, you may reposition the policy for other possible needs, like helping to supplement your retirement income.

 

 

Get started today. Contact your LHENetwork representative and financially protect what’s important now, while helping to fund a college education.

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Robert E. Chittick is CEO of the LHENetwork. He is also the founder and partner of LHENetwork, The Life and Health Experts, Canaan Financial Group and Canaan Marketing. He is a sales coach and trainer for insurance agents, financial advisors and planners since 2001. He can be reached at rchittick@cag-1.com.
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