College Planning With Life Insurance

What is college planning with life insurance?

College planning with life insurance is a self-completing plan. The primary purpose for life insurance is to provide a death benefit to beneficiaries. This benefit protection can make life insurance an attractive choice to help fund a college education in case of a premature death.

Life insurance also can provide a tax-deferred growth vehicle that can accumulate cash values inside the policy. These cash values can be withdrawn to help fund college.

While many people are aware that cost of a college education has been on the rise, many underestimate just how large this cost has grown.

Over the past decade, the published in-state tuition and fees for four-year public colleges and universities grew at an average rate of 2.9% per year beyond the rate of inflation.

At the same time, many families lack life insurance protection, which many consider to be the cornerstone of financial protection.

Recent studies have shown that four in ten U.S. households have no life insurance at all. This leaves them vulnerable should the primary breadwinner die unexpectedly.

Many people do not realize that with the right life insurance policy, you can secure needed death benefit and gain a way to help pay for college.

Why college planning with life insurance?

Your personal savings should be the primary source for college funding. However, that comes with a challenge if the family’s primary breadwinner dies prematurely.

If that occurs typically the personal savings plan comes to an abrupt end. In this situation, a life insurance policy can help. The policy’s death benefit could be used to help pay college tuition cost.

How does the cash value of life insurance help with college?

Most all permanent life insurance plans like whole life or universal life the policy will earn interest and accumulate cash values. These accumulated cash values will grow on a tax-deferred basis.

At some time in the future these cash values can be accessed thru withdrawals or policy loans.

Loan options using the cash value of a life insurance policy as collateral can sometimes be an quick an easy way to provide money for college tuition.

The loan option does not require any paperwork to be completed by the parent or the student. No need to show financial justification. There is no applying and hoping to get approved. It is as simple as calling up the insurer and requesting the amount you need.

In addition, the loans are usually at very favorable terms. Also, if loans are not paid back to the insurance company no one comes looking for you. The loan amount and interest are just deducted from the death benefit payout.

Important: It is important to remember to always keep the life insurance policy in force if you have no plans to pay the loans back. By letting the policy lapse there could be a taxable event. Always check with a tax adviser if you’re unsure.

There are many good books available that illustrate how you can use a permanent life insurance policy to fund college, retirement, trips, etc. I recommend “Becoming Your Own Banker” by Nelson Nash.

Who needs college planning with life insurance?

  • Are you in need of life insurance protection to help ensure your family is financially protected?
  • Do you have a child or children up to 13 years old?
  • Are you concerned about college tuition costs?
  • Are you possibly looking to help supplement income in your retirement years?

How does college planning with life insurance work?

Dave and Dianne are a young couple with two small children. Dave is 28 and Dianne is 26. Dave is the primary breadwinner. The children’s age are 4 and 2.

Dave has a mortgage and two young kids. He knows he needs to protect his family while also planning for the future.

After exploring his options and a thorough needs based discussion with his life insurance representative, Dave concludes that life insurance will satisfy is needs. Dave decides to purchase a coverage amount of $750,000.

Dave uses a combination of term life insurance protection and universal life protection to fit his budget. This protects his family in case of his unexpected death. This also build cash value for future college tuition cost or possible supplemental retirement.

Being that Dave’s youngest child is two years of age he decides to split the coverage between $500,000 20 year level term and $250,000 universal life.

This combination of protection will guarantee life insurance protection until his youngest child is out of college. In addition, he has 16 years to fund the universal life policy to help pay for college tuition.

What if the kids gain scholarships or decide not to go to college? Dave now has an excellent start on a terrific supplemental retirement plan.

Dave will continue to fund the universal life insurance plan to age 65. Now, Dave will have substantial tax-deferred dollars accumulated.

After reaching age 65 and with his life insurance needs probably diminished, Dave can now access his cash values by using the very friendly loan option.

This option allows Dave the ability to access his cash value on a tax-free basis. Any remaining death benefits paid out after Dave’s passing will also be paid out on a tax-free basis.

Summary of college planning with life insurance

As you can see college life insurance planning is not only a great way to protect you against the unexpected, but also a terrific way to plan for college tuition costs and supplemental retirement needs.

If you meet any of the criteria for college life insurance planning and would like to see how your plan would work, simply contact us at 1-888-393-9003 or

For a FREE quote

Call, text, email or fill out our instant quote form:

Call: 678-207-8160
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How can I help?

Mike Raines

I am an independent life insurance agent with over 30 years’ experience. I am an expert in finding coverage for those with past or current medical history such as heart disease, diabetes, post cancer, etc. I also specialize in those that participate in scuba diving, mountain climbing, private pilots, etc. I work with the best life insurance companies in the nation, such as Prudential, AIG, Protective Life, Transamerica to name a few. Each carrier has different opinions on rates and underwriting, and it is my job to match you with the best company. To do that, I need to ask you a few questions about your health and lifestyle to qualify you.

For a FREE quote, call, text or email:

Call: 678-207-8160

Text: 678-207-8160


Mailing Address:
3482 Keith Bridge Road Suite #125
Cumming, GA 30041


Mike did an outstanding job getting me my coverage. He went above and beyond answering all my questions. He always returned my calls immediately even on the weekends!!! I highly recommend him.

- Aileen from Woodstock, GA.

I tried several places before I came across Mike’s website. The insurance at these other places was either very expensive, or the company wouldn’t cover me because of my health history. Mike was able to find me a reasonably priced policy with a major insurer. He did a great job locating a policy that works well for me.

- Jeff from Hermon, ME.

Thank you very much, Mike, for all your help in this long process. I know it wasn’t easy, but I appreciate you not giving up on my application and helping provide peace of mind to me and my family.

- Craig S. from Savannah, Ga.

I could not be happier working with Mike Raines to get life insurance coverage for myself after having been declined for health reasons by my employer. My wife and I just had a son and it had become more imperative than ever that my family be protected if I were to pass away. The health screening appointment was conducted at my home around my schedule, which was very convenient. It was clear to me that Mike went above and beyond to make sure the underwriter fully understood my situation, going to bat for me so that I would not be declined again. I am a very happy customer.

- Daniel S. from Seaside, CA.

As someone with a past cancer diagnosis, finding life insurance had been a huge annoyance. Mike made it easy, and somehow found quotes that were significantly more affordable than what others gave me.

- Matthew from St. Louis, MO.

Mike and his team made the entire process from start to finish very seamless and also overcame the task with us being multiple states apart with ease. With the easy process and very competitive priced insurance for high risk athletes, you have no need to look anywhere else for coverage. Thanks to Mike and his team for all they did and I highly recommend them for your Special Risk Life Insurance needs.

- Tyler C. from Danville, VT.

Mike did an awesome job in finding affordable coverage for myself and my husband. Highly recommend his services.

- Shannon from Atlanta, GA.

Two Thumbs Up for Mike at Special Risk Term

- Yaniv from Troy, MO.

Mike and Special Risk Term are absolutely top shelf! I was worried that I would not be able to get term life insurance to protect my family, or that the costs would be exceedingly high.

Mike knew the industry inside and out and knew which companies would provide the best options. He coordinated with the underwriters to get the job done and get me an affordable plan, and kept me updated throughout the entire process. Not to mention he did it all electronically in the age of COVID without ever having to meet in person. Highly recommend. Excellent service and expertise!

- Chris M. from Laguna Niguel, CA.

I contacted Mike for advice with life insurance. I had recently left a large firm (where I had life insurance coverage as part of compensation package) to start my own company.  Therefore I needed to self fund my life insurance.  Because of some past health issues I figured I may need to do extra tests to validate my current excellent health status and insurability.  Mike was great to work with, knowledgeable about how underwriters view things, how they will want lots of data from my doctors, and he explained the normal full battery of new tests and data as well as additional or special tests they might want based on my history.  He helped me through the valley to the other side of the life insured promised land for $500K term policy with a duration that meshes well with my retirement date/options and coverage for my family if needed. I highly recommend Mike with Special Risk Term.  He can help you too, so call or email today.

- Richard M. from Ann Arbor, MI

We work with individuals across the nation to secure the best life insurance rates.

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