Life Insurance as a Solve for the Costs of College

Life Insurance

Life insurance is a great way to eliminate your risk against a catastrophic loss. Have you thought about using life insurance to build additional income for your children’s college years?

College education and books get more expensive every year. When you have infant children, you can actually put a permanent life insurance policy on them that can grow cash value that they can loan against to help them through those tough financial college years. Usually the insurance product purchased is either with a whole life, universal life or variable universal life policy.

If they’re very young, the best approach might be a variable universal life insurance policy. These policies take the premium amounts that are paid in, and puts them into sub accounts, which are then invested. Because those accounts are investment accounts, depending on how aggressive the portfolio is that you choose, they could potentially grow a significant amount of cash value.

If you think about it, when your child is born, they would basically have 18 years of an investment time frame to grow that cash value through the sub account investment. Should they reach their college years and get a scholarship or have enough money to tackle their college costs, then you’ve already got them onto a retirement investment path.

Suppose the situation is that they need to take student loans? Having that additional cash value can help soften the blow of having to pay those college loans back at a later date. Most people don’t think of using life insurance as an investment, but the thing that’s on your side is time with young children. So considering putting a life insurance policy on them at a young age could turn out to be a smart investment. 

About the author: Mark Yurkovic has been in the life insurance business for over 12 years, and holds CLTC, LUTCF, and CES designations. He enjoys building remote control boats, and playing instruments including the piano, guitar, banjo, and mandolin. Mark would love to discuss life insurance options and work towards finding the best policy fit for your family. You can contact Mark at 1-800-651-1953 or MYurkovic@Pivot.com.