Thinking about how to pay for College Planning with Life Insurance
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What would happen to your child if you were gone? What kind of future could your child look forward to? Would he or she have to choose between
forgoing career goals or incurring a massive student debt? If your answer to these questions is “I don’t know,” then you need to consider adding
life and disability insurance policies to your portfolio. Life Insurance While you hope to be there when your child graduates from college,
the truth is there is no guarantee. Having a life insurance policy in place can help finance your child’s future education, even when you are
no longer there to provide direct monetary aid. Life insurance falls into two categories: term and permanent. Term life insurance is more affordable,
but only provides protection for a specific time period (for example, a 20-year term) and generally pays a benefit only if you die during the
term. This can be a good option if you have a need for coverage that will end at a specific point in time, such as when your last child graduates
from college. Permanent life insurance provides lifelong protection, accumulates cash value and pays the full face amount at death. Depending
on the policy, you may also be able to take advantage of an accelerated death benefit in the case of a terminal illness, which allows you to
draw some or all of the death benefit to handle current expenses, with the remainder provided to your beneficiaries upon your death. Disability
Insurance While you may be funneling part of your earnings into a college fund for your child, what will happen if you are disabled and can’t
work? You have a three in 10 chance of suffering a disabling illness or accident that keeps you out of work for 90 days or more during your
career. What would happen if your paycheck were to stop? Would you have to tap into savings to make ends meet? And how would you continue to
put money aside for your children’s education? If you think you could rely on the government, think again. The average monthly benefit paid
by Social Security Disability Insurance (SSDI) is a little over $1,100 a month, and most people who apply for benefits are initially denied.
But if you have a disability insurance policy in place, you’ll receive an income if you are unable to work because of illness or injury, thereby
helping to ensure that your plans for your child’s future can still become reality.

Source: Blog