Can Whole Life Insurance Cover College Costs?

Whole life insurance can be a surprisingly long-term investment. The policy can build enough cash value to cover your children’s college education. There are of course, some conditions for this to happen. You will also need to find an affordable whole life insurance quote. However, there is a way in which you can have life coverage and pay college tuition costs at the same time.

college-costHow does whole life insurance work?

Whole life insurance is a permanent plan. The insured will be covered until he or she dies, but only if the premiums are being paid. The obvious advantage is that eventually, your policy will make a benefit payment.

The other extra feature is the investment component. Whole life insurance policies build cash value by deducting a part of your premiums and investing that amount. The generated interest will accumulate regularly into your policy’s account. The rate of return is fixed. In other words, your policy generates money.

How can it pay for college?

If you buy whole life insurance when your child is still young, the policy’s cash value may reach a high amount by the time you child goes to college. You, as the insured, can withdraw money from your policy’s account. The amount will not be taxed as long as it is smaller than your policy’s value.

What are the conditions?

In the beginning, I have mentioned some conditions that need to be met in order for this policy to be profitable.

  • You have to find an affordable price. Make sure you find a good whole life insurance quote, because these policies can be quite expensive to keep.
  • It needs time. You have to buy this policy quite early if you want a high generated amount of cash by the time your child goes to college.
  • Good fixed rate. The rate is the percent of the investment which goes into your policy’s account. Make sure you look for a plan with a high fixed rate for bigger investment opportunities!

In conclusion, whole life insurance can pay for college tuition costs, but you need to make sure that you have enough finances to support the costs of a plan!

If you need whole life insurance, we can help you find the cheapest price. Visit our website and get quotes from top providers!