As the cost of higher education continues to rise, increasing numbers of families are looking for ways to cover the tuition and other fees for their children. What many people don’t consider, however, is a whole life insurance policy. The National Center for Education Statistics states that the cost of attending a public college has increased over 37% since 2000, and will likely continue to rise. In addition, the poor job market and economic condition is making it more important than ever for students to have a college degree in order to be competitive.
The Role of Whole Life Insurance
According to MetLife advance markets director, Joseph Kuo, most Americans forget all about the possibilities that whole life insurance provides for college funding. The great thing about this type of insurance is that it accumulates cash value over time. If you have had your whole life policy for a while, you likely have built up cash value that you can tap into to help pay for your child’s college education or to meet other financial needs.
Insurance As Part of a Financial Plan
A 2012 Deloitte research study showed that many people do not understand, or are unaware of, the many benefits of permanent life insurance and never take insurance into consideration as part of a long-term, comprehensive financial plan. However, if you have whole life insurance, you should speak with your financial advisor or consultant about the possibility and benefits of accessing your built up cash value.
How It Can Help
While there is little doubt that successfully paying for college takes a combination of early planning strategies, scholarships, financial aid, grants, and other sources of money, families that have cash value life insurance policies should definitely figure that money into the final plan. Although it is unlikely that your life insurance alone will provide enough cash to pay for your child’s college, it can be a valuable tool when pooled with other assets, and may make your child’s dreams of a college education much more feasible.