Using Whole Life Insurance to Help Pay for College, Leave a Legacy & More!

MetLife Insurance

Do you love your child? How can you prove it? Recently I heard of a family that paid $10,000 for their baby’s 1st birthday! Is that love? What if I told you, $100 a month could provide money for your child’s higher education, retirement, and provide a legacy for your grandchildren? Would setting up your child for a solid financial future demonstrate your love? I believe it would. Let me show you how you can accomplish all those things in just 20 years.

MetLife has a Whole Life Insurance product known as Promise Whole Life Select 20 (PWLS 20). The Select 20 means that the policy is completely paid up in 20 years. In the example I will base this blog off of, I ran a PWLS 20 illustration for a 0 year old female (a newborn) at a premium of $100/month. That premium amount purchases a life insurance policy with a death benefit starting at $158,341. (I say starting at because in the illustration I ran, the dividends this policy receives will buy more insurance.) The illustration uses dividend projections based on the level at which they are paid today. Dividends are not guaranteed but MetLife has consistently paid a dividend for over 140 years. The rate at which they’re paid will vary from year to year.

At the end of 20 years, the policy will be paid up. In our example, the now young woman is 20 years old and in college. When she is 21, I show a $20,000 tax free withdrawal from the value in the policy, to pay back any loans that may have been taken out to this point. (The average student loan debt for the class of 2013 was nearly $30,000.) The withdrawal is a combination of surrender of dividends and loan from the cash value. (Remember that no more premiums have been paid since age 20 but the policy, despite the withdrawal, still grows in cash value and still receives dividends.) After the withdrawal, the yearly policy dividends continue and can be used to pay back the loan portion of the withdrawal.

At age 22, the young woman in this example has a paid off $20,000 in college debt and has a life insurance policy with a death benefit totaling over $145,000 (Initial death benefit minus the outstanding loan) that is still growing. Not only does this person have life insurance for the rest of her life but the dividends can now be used to pay back the policy loan. By doing so, the cash value in the policy gets replenished. As illustrated, the loan is paid up when the woman is 71 years old, at which point in time, the available cash value is over $94,000.

This woman could decide to withdraw a lump sum or schedule annual withdrawals like I illustrated for 11 years. (11 years was an arbitrary number.) From ages 72 to 82 this person withdraws over $51,000 tax free and at the end of the withdrawals, at age 83, she still has over $73,000 in available cash value and has a life insurance policy worth over $117,000.

This was just an example of how this type of product can work for you. Whether your child is a newborn, toddler or older, if you have the means and the fiscal discipline to stick to a plan, MetLife’s Promise Whole Life Select 20 could benefit your family immensely. 

About the author: Anthony Veloso has been in the life insurance business for over 2 years. He enjoys coaching football, playing outside with his dog, and taking day trips with his wife and newly born daughter. Anthony is a strong supporter of Orphanages and Battered Woman’s shelters. He would love to put his experience to work for your family to ensure that you have the right life insurance policy. You can contact Anthony at 1-800-654-1953 or