Supplement College Funding with Protection

How Whole Life Insurance Can Help Fund College Expenses

The dream of our children or grandchildren graduating from college continues to be a top priority in our lives. Achieving this requires a sound college funding strategy and getting an early start to planning can prove to be advantageous.

A whole life insurance policy can be a foundational piece in your overall financial plan. It helps protect your loved ones, today, and in the future, with policy premiums that stay level, meaning they will never go up. Whole life insurance provides financial security for your family in case you die and can no longer provide for them.

It doesn’t stop there — whole life policies build cash value available throughout your lifetime to assist with various financial milestones, including funding your child’s or grandchild’s education. * Leveraging the policy cash value as part of an overall college funding strategy offers several advantages including:

  • Taking a loan from the policy cash value is not subject to income taxes or penalties (assuming the policy doesn’t lapse). *
  • A policy loan may be an attractive alternative to a student loan, a home equity loan, or borrowing from your retirement. Policy loans are not subject to credit approval and don’t carry a fixed repayment schedule.
  • Policy cash value increases each year and will never decrease due to market conditions.
  • Personally owned life insurance policy cash values are fully or partially protected from the claims of creditors in most states.
  • Life insurance cash values are generally not considered in determining eligibility for financial aid. This may help a student qualify for more aid.
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IMPORTANT DISCLOSURES

* Distributions under the policy (including cash dividends and partial/full surrenders) are not subject to taxation up to the amount paid into the policy (cost basis). If the policy is a Modified Endowment Contract, policy loans and/or distributions are taxable to the extent of gain and are subject to a 10% tax penalty if the policyowner is under age 59½. Access to cash values through borrowing or partial surrenders will reduce the policy’s cash value and death benefit, increase the chance the policy will lapse, and may result in a tax liability if the policy terminates before the death of the insured. The decision to purchase life insurance should be based on long-term financial goals and the need for a death benefit. Life insurance is not an appropriate vehicle for short-term savings or short-term investment strategies. While the policy allows for loans, you should know that there may be little to no cash value for loans in the policy’s early years.

Product availability varies by carrier, state, and individual eligibility. Not all products listed are available in all states or to all applicants. Product descriptions on this page are for general informational purposes only and do not constitute a solicitation or offer to sell any specific insurance or annuity product. All products are subject to underwriting approval and applicable state insurance regulations. Riders and benefits are subject to additional charges, terms, conditions, and limitations. Variable products involve investment risk, including possible loss of principal, and are sold by prospectus. FundaDream Insurance Solutions, Inc. is a licensed California insurance corporation. Consult the applicable carrier contract for full terms, conditions, and limitations. FundaDream’s charitable giving is made from general corporate revenues at the sole discretion of FundaDream leadership and does not constitute compensation to any licensed insurance professional.

The decision to purchase life insurance should be based on long-term financial goals and the need for a death benefit. Life insurance is not an appropriate vehicle for short-term savings or short-term investment strategies. While the policy allows for loans, you should know that there may be little to no cash value for loans in the policy’s early years.

The information provided is not written or intended as specific tax or legal advice. FundaDream, its employees and representatives are not authorized to give tax or legal advice. Individuals are encouraged to seek advice from their own tax or legal counsel.

Insurance products and services are offered through FundaDream Insurance Solutions, Inc., California License No. 0M95835