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| Include Whole Life Insurance - A Must |
There are several good reasons:
1. Life insurance is a "self-completing" plan. If a parent dies while the child is still young, life insurance would pay an income tax-free death benefit to the beneficiary (presumably the surviving spouse) who can use that money for the children's college education.
2. If you become seriously ill or disabled, with waiver of premium included as a feature of the policy, the company will pay the premium for you and keep your policy in force with the cash value continuing to build up.
3. Cash value in a life policy will not only grow tax-deferred, but can be borrowed tax-free for college expenses, through policy loans. If its never paid back, it will simply be subtracted from the face amount the beneficiaries will receive when the insured passes away.
4. After borrowing from the policy, it will still have cash value remaining or once again begin to grow for years to come. When you retire, you can access that cash through withdrawals and policy loans. This is using your policy to its greatest potential.
5. Also, money in a whole life policy is not a countable asset when a child applies for college financial aid.
2. If you become seriously ill or disabled, with waiver of premium included as a feature of the policy, the company will pay the premium for you and keep your policy in force with the cash value continuing to build up.
3. Cash value in a life policy will not only grow tax-deferred, but can be borrowed tax-free for college expenses, through policy loans. If its never paid back, it will simply be subtracted from the face amount the beneficiaries will receive when the insured passes away.
4. After borrowing from the policy, it will still have cash value remaining or once again begin to grow for years to come. When you retire, you can access that cash through withdrawals and policy loans. This is using your policy to its greatest potential.
5. Also, money in a whole life policy is not a countable asset when a child applies for college financial aid.
The self-completion, locked-in investment gains, tax-favored access to cash throughout the owner's life, and exemption from countable assets are significant values to the client.
Furthermore, you may choose to have your children take out student loans to pay for college knowing that the interest rate is very low and that the money in the life policy will grow at a better rate.
This provides leverage and options for the parent, and the ability to give more money to the child tax-free later on, to pay off the student loans and then some.
Leave your comments and questions below.
This provides leverage and options for the parent, and the ability to give more money to the child tax-free later on, to pay off the student loans and then some.
Leave your comments and questions below.
