College Planning

• Many funding vehicles available:
• Personal savings 
• 529 plans 
• Brokerage accounts 
• Retirement plans 
• Home equity  

1. Protecting against the unexpected.

• The primary purpose of life insurance is death benefit protection.
• Protect what is most important.
• Protect your entire financial plan.
• Death benefits could be used to assist with tuition.

          2.     Helping with tuition cost.

• Potential to grow cash value:
• Potential tax-deferred growth.
• Potential for tax-free distributions.
• Under the control of the policy owner (parent).

• If the unthinkable happens the death benefit can complete the college funding plan.

•  Cash value generally grows tax-deferred.
• Cash value growth protected from downside market performance.

•  Opportunity to take loans or withdrawals* tax-free.
• Distributions could be used to help with tuition payments and other educational expenses.

*Withdrawals up to the basis paid into the contract and loans thereafter will not create an immediate taxable event assuming the policy is non-mec. A policy lapse could cause a taxable event.

• Protected from chronic illness, terminal illness and critical illness. 
• Advance part of the death benefit income tax free.

If college funding is no longer required, cash value could be used for other goals:

• Retirement
• Home
• Vehicle
• Owning a business.   

•  Death benefit protection completes savings plan in the event of untimely death.
• Cash value can be used as tax-free assistance for tuition.
• Life insurance cash value is not considered an asset for federal financial aid calculations.

  529

• Death benefit equals account value.
• Included in federal aid calculations.
• Tax-deferred growth.
• Tax-free distributions if used for qualifying expenses.
• Generally 10% penalty if not used for qualified educational expenses.
• Open to market risk.

    Life Insurance

• Death benefit completes college savings plan if worst were to occur.
• Not included in federal aid calculations.
• Tax-deferred growth.
• Tax-free distributions for higher education.
• Downside protection from market performance.
• Flexibility to use for expenses other than higher education.

What are you willing to do to ensure your child walks across that stage and receives their diploma?