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College Planning
According to experts, by
the time a child is ready, a college education can cost more
than $100,000.Are you
ready???
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Lifetime Investment
As you know, college is a lifetime investment.
College graduates earn an astounding 80% more on average
than high school graduates. Over a lifetime, this figure
adds up to a gap of over $1,000,000 between those who earn a
BA or higher and high school graduates (source: Trends in
College Pricing 2002,
www.collegeboard.com)¹. Even though the thought of
paying for a college education is frightening, the cost of
not sending a child is even more alarming.
So how do you prepare a plan your customers can use to pay
for something that may be 15 years off? Since the cost of
colleges has recently increased at a rate almost three times
that of inflation (source: Trends in College Pricing 2002,
www.collegeboard.com)¹, parents need to plan wisely and
utilize the many investment strategies available.
College Planning Using Life
Insurance
Why should you suggest life insurance as a college
planning vehicle?
Interest credited on the accumulating cash values is not taxable as
income under current law. So the interest credited stays in
the policy and is credited with additional interest.
Your customer's money can accumulate at a more rapid
rate giving your customer the opportunity to build a
substantial college fund.
The opportunity to access money tax free is a valuable
tax advantage. A loan can be taken against the cash value of
the policy. As long as the policy stays in force, there are
no tax consequences.
Security
Of course, life insurance offers valuable family protection.
By carefully planning how much coverage may be necessary,
the benefit payable upon the death of a parent can provide
enough to pay for the college education of the children and
secure the lifestyle of the family for years to come.
There are many factors to consider when creating a plan,
including the number of years they have, the type of
institution they are planning for, and the availability of
financial aid/grants. As you meet with your customers, be
sure to discuss all of the appropriate options to determine
the most suitable investment plan.
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