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Hayward, CA – Best Ways to Save For Your Child’s College | Life Insurance Agent’…

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Besides being happy and healthy most parents also want their children to be financially secure.  One path to financial security is a good education.  Education and in particular college education is in a word, expensive and rising by approx 5% a year well into the foreseeable future.

Most parents of moderate means cannot afford college tuition and the associated housing and material costs.  While scholarships, grants and other forms of financial aid are available, most families do have to pay a considerable amount out of pocket
There are a few options to save for college, 529 plans being the most popular followed by traditional savings accounts.  While both are good ways to save another option is to consider Indexed Universal Life Insurance.
Here is a chart detailing the features of each

Savings Plan

Indexed Universal Life Insurance Traditional 529 Plan Savings Account
Earns interest and accumulates cash value. Provides death benefit Earns interest. No death benefit Earns interest at the lowest rate. No death benefit
Indexes to the S&P with downside protection Subject to the stock market; potential for loss as market drops Fixed interest rate, usually the lowest
Living Benefits; access to policy value for a health emergency No cash value access for emergency health issues Funds fully accessible
Disbursed funds can be used for any purpose Disbursed funds can only be used for education; no other use Funds can be used for any purpose
Distributions are tax-free Fund gain is taxable Fund gain is taxable
Funds are not included in Financial Aid analysis. Funds are included in Financial Aid analysis; financial aid award is potentially reduced by how much is in the 529 plan Funds are included in Financial Aid analysis; financial aid award is reduced by how much is in the savings account
Policy accumulates value past the college expense payments Fund depletes after college payouts Funds, if not entirely withdrawn, continue to accumulate interest
The policy allows for the withdrawal of cash value for personal needs NA Funds available

This blog is not intended to impart Tax, Financial or Legal advice.  Contact me for specifics of your particular situation. You don’t know what you don’t know.

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Alameda County: Hayward, , , , , CA

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“Best Best Insurance Company in Hayward, CA”

Top Rated Local Top Rated Life Insurance Agent / Agency

Alameda County: Hayward, , , , , CA

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Hayward, CA – Best Ways to Save For Your Child’s College | Life Insurance Agent’s Blog