Permanent Life Insurance as Part of a College Savings Plan

Of all the solutions that are discussed for funding a college education, none is less glamorous than permanent life insurance. And none of them is more necessary.

All of the other solutions fail if you die or become disabled and can’t continue to make annual contributions. Under this scenario, only life insurance succeeds.

Permanent life insurance offers several advantages as part of a college savings plan.

  • Permanent life insurance provides benefits in the event of the insured’s death – meaning that if something happens to you or your partner, your child can still attend college.
  • Your permanent life insurance policy will accumulate cash value on a tax-deferred basis.
  • The cash value of a permanent life insurance policy can be used for any purpose. Depending on the type of policy and how it is structured, you may be able to access this cash value (through partial surrenders and/or policy loans) to help pay tuition and living expenses.
  • Permanent life insurance is one of the few assets that will not be taken into consideration for the purposes of determining your child’s eligibility for financial aid.

Some education funding tools dictate how and when the money you have saved must be used to avoid penalties and taxes. Permanent life insurance doesn’t. If you decide not to use your life insurance to help with a college savings plan, it just keeps on growing – tax-deferred.

Planning for your financial security means more than just creating a college savings plan. To be certain funding will be available when needed, consider other potential life events that could affect your goals:

  • Unexpected death of you or your partner
  • A disability or illness that could prevent your or your partner from working
  • Your own retirement savings goals

Unless you plan for these possibilities with adequate life insurance, disability insurance and other financial products, you or your family could be forced to tap into savings to cover other expenses.
Bleakley, Schwartz, Cooney & Finney, LLC
100 Passaic Avenue
Suite 300
 • Fairfield, NJ • 07004-3508
Phone: (973) 575-4180

Northwestern Mutual is the fleet name for The Northwestern Mutual Life Insurance Company, Milwaukee WI (NM), its subsidiaries and affiliates.  Bleakley, Schwartz, Cooney & Finney is a marketing name used by Northwestern Mutual representatives located at 100 Passaic Ave, Suite 300, Fairfield, NJ 07004-3508.  Bleakley, Schwartz, Cooney & Finney is not a registered investment advisor, broker-dealer, federal savings bank or subsidiary or affiliate of NM.  Insurance Products are available through insurance agents of The Northwestern Mutual Life Insurance Company, Milwaukee, WI (life insurance, disability insurance, and annuities) and Northwestern Long Term Care Insurance Company, Milwaukee, WI, a subsidiary of NM (long term care insurance).  Securities and investment advisory programs are offered through registered representatives and investment advisory representatives of Northwestern Mutual Investment Services, LLC (NMIS), a wholly-owned company of NM and a dually registered broker-dealer and investment adviser, member FINRA (www.finra.org) and SIPC (www.sipc.org).Investment advisory programs and trust services are offered through Representatives of Northwestern Mutual Wealth Management Company® (NMWMC), Milwaukee, WI, a wholly-owned company of NM and limited purpose federal savings bank.  Investment products are not insured by the FDIC, are not deposits or other obligations of, or guaranteed by, NMWMC or its affiliates and are subject to investment risks, including possible loss of the principal amount invested. The products and services referenced are offered and sold only by appropriately appointed and licensed entities and representatives of such entities.  Each Financial Representative represents one or more, but not necessarily all of the entities shown and may not provide all the services discussed on this Web site. Not all products and services are available in all states. The Northwestern Mutual Life Insurance Company is neither a registered investment adviser nor a registered broker-dealer. There may be instances when these insurance agents represent insurance companies in addition to NM or its affiliates.Not all persons using the Bleakley, Schwartz, Cooney & Finney name are able to offer advisory services or securities.