The cash value accumulation on a whole life policy and a universal policy build quickly in the early years of the policy, and decreases as you get older because more of the premium goes toward the death benefits.
This is the ideal situation because if you bought the policy when you younger, then when the kids are ready to graduate from high school and go to college, the cash value accumulation will have been growing through the life span from when you bought the policy.
Now, here’s the part where you can use your permanent life insurance policy to give the kids a helping hand to pay for their college tuition.
Borrow Against the Life Insurance Policy to Pay for Tuition
That’s right! If you have a permanent life insurance policy you can borrow money from the cash value accumulation portion of the policy and use it to help pay for the tuition costs of your children’s college education.
On many policies you can borrow to as much as 75% of the value of the cash value that has accumulated over the years that you had the policy. So, if your policy has built up $100,000 in cash value, you can borrow up to $75,000 against the cash value accumulation.
Do you have to pay it back? Not really, but you should be aware that whatever you borrow will decrease the amount of the death benefits accordingly. This means that if you had $500,000 in death benefits, your beneficiaries would receive $425,000 as a lump sum payment of the death benefits.
You won’t be able to borrow against the cash value accumulation again unless you re-pay all the money back and there will be interest involved. So, you must use this to your best advantage and not be frivolous about the money you borrow.
In any event, it’s a win-win situation for you and the family because the kid’s tuition could be looked after, and your family can still be financially protected with the death benefits should something happen to you.
Where Can I Find an Affordable permanent Life Insurance Policy?
You always want to talk to an independent agent like myself. We can access and research dozens of companies so you are assured we will find the best policy at the most affordable rates. If you have health concerns, don’t let that dissuade you because we can give you valuable advice and help you to find a policy that suits you.
Whatever your needs or questions then please call me direct at 877 – 966 – 9383.