Did you know you can grow your life insurance business by talking to clients about using life insurance in the college funding process? 90 percent of all parents with high school or older children feel unprepared for the high cost of a college education and wish they had an account of some type to withdraw funds. Many of your clients may not be aware of the benefits of using life insurance for college funding.
There are many planning options available when it comes to paying for college, such as custodial accounts, 529 plans, pre-paid college accounts, traditional savings or investment accounts and financial aid (scholarships, grants and loans). But many of your clients may not be aware of the benefits of using life insurance for college funding. Life insurance offers fewer restrictions on distributions and makes it possible to shelter funds when applying for additional financial aid.
There are many reasons your clients should consider life insurance for college funding. One important reason would be if a parent dies before the child enters college the life insurance is there to help the child with financial needs. For parents who are around for the child to go to college, life insurance is a perfect planning vehicle for covering the parent’s college funding wish list.
As you see, life insurance is a perfectly designed funding plan that gives the parent everything they would want in a college savings vehicle.
When your clients child goes off to college, they will have to fill out the FAFSA (Free Application for Federal Student Aid) to determine how much the family contribution should be and therefore how much financial aid should be given. The process requires them to list all income and assets. There is a loophole or a way around how you can fill out the FASFA. Any insurance products do not have to be listed on the form; this includes cash and accumulation values in life insurance and annuity products. So the more money your clients have in life and annuity products, the more financial aid the child is eligible for.
There are many different types of life insurance your client can choose from for college funding.
Going over the different types of insurance and the pros and cons of each with your clients will help determine which one is the right fit for them and get them on their way to having that college funding plan in place. Life insurance is typically a future need, but by presenting solutions to current problems that life insurance can solve, clients are more willing to act now and buy life and annuity products now.
For more information watch this video, where Todd Davis discusses college funding using life insurance: