Whole Life Insurance and College Planning

We all know college is expensive, and most experts predict costs will continue to increase by 5% to 10% annually for the foreseeable future.* Here are four reasons whole life insurance can be a powerful tool in college planning.

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1. It's not considered in federal financial aid calculations. While many scholarships reward merit, most financial aid is based on need. To receive financial assistance, a family or student must complete the Free Application for Federal Student Aid (FAFSA). Information on this application is then analyzed using the federal methodology formula.
   
   
2. It's flexible. Unlike some college savings plans that may require money in the plan to be used for "qualified education expenses," there are no restrictions on how a policyowner uses the buildup of cash value in a life insurance policy. Cash value, accessed through policy loans, can be used for college, a down payment on a house, to start a business, years later for retirement, or for any purpose you want.
   
   
3. The growth of the policy's cash value is guaranteed and it, along with non-guaranteed dividends, accumulates on a tax-deferred basis. Money in some college savings plans fluctuates with the market.
   
   
4. It provides a guaranteed death benefit. If the insured dies prematurely, the guaranteed death benefit can be used to pay college costs.

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