College tuition prices are steadily rising, and most financial aid, scholarship, and grant programs are not. If you’d like your child to get a college education, it could cost you anywhere from $50,000 to well over $150,000 for a four year degree. Most people think that 529 plans are the best college savings plans available, but that isn’t the case. Index universal life insurance (IUL) is an insurance policy that gains interest overtime and can be used as a college savings plan. It’s safer than some 529 accounts, and comes with benefits that 529s can’t offer.
Index universal life insurance is a policy that you pay into either monthly or annually. They money you put in gains interest based on an external index, like the S&P 500. However, unlike some 529 plans, IULs have no market risk, so you will not lose money when the market is down. You also won’t have to pay taxes on the money you take from the policy.
One of the biggest problems with 529 plans is that you have to use the money for educational purposes and may be required to prove it in order to access your money. You’ll also have to pay hefty penalties if you use the money for anything other than educational expenses. With IULs, you can use the money for whatever you’d like and can access the cash value whenever you’d like. You won’t have to worry about penalties or waiting until the college bills come rolling in to access the money. You also won’t be penalized if your child decides not to go to college, or chooses to get an education at an institution that is not approved by 529 accounts.
If you’d like to save for your child’s education without the risk of losing money or paying heavy taxes and fines, fill out the form to the right or give us a call. A licensed insurance agent will help you customize a savings plan that works for you and your child’s needs. If you’d like to learn more about other types of life insurance, check out our specialized coverage page.
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