Planning for your children's college education is both an exciting and terrifying prospect. To send your child to a state university today you are looking at approximately $50,000 for a 4-year degree. Eighteen years from now you should expect to pay nearly $100,000 for the same degree if cost increases are consistent at 5% per year. Unless you happen to have $100,000 in your bank account, you probably should start saving now.
Universal Life (UL) Insurance can help you with this daunting task. Since you already have a need for life insurance, why not use the tax deferral feature on cash deposits to help you? This special IRS exception is exactly why UL is the preferred tool used by financial planners to save for college. Once the policy is in force you know how much the insurance costs and all you need do is increase your monthly or annual payment enough to allow for the withdrawals you need for tuition payments in the future. If done correctly, the cash values will be there when you need them and the withdrawals will neither be taxable nor affect the performance of your underlying life insurance. You earn a decent return on your money and can feel secure in knowing that this difficult task is on its way to completion.
