Touchy Subject.

Today I thought that I would take a few minutes and talk about the use of insurance to fund you children’s education, and why would you do that. There a several reasons but lets get the touchy one out of the way first, Life Insurance is not for the dead it is left for the living and I know that when my children grew up I did not have any life insurance on them and never wanted to think about what would my wife and myself do it one of the kids died.

I did  have a young girl that I took to Daddy daughter dates, taught her to drive, and she showed up to our home every Friday night to babysitter our kids. I was her surrogate dad because her father had died one day at work.

 One day she was at girls camp by the river where she went to get water, she slipped in the water it was icy and swift  there was a waterfall just down stream and Shirley died. There was no money to take care of funeral  arrangements so a collection was taken. No plan was made for her death or education.

If Shirley had not slipped in the river and died she would have wanted to get and education but she did not have the grades or physical skills to get scholarships, and her mom had no money.

An inexpensive answer to this would of been a cash value life insurance policy

The reason is self explanatory for death but why for education? The government has a IRS code called 529 and it is a plan where we can put money away for our family to pay for college education. The good points of the 529 is that it is and grows tax deductible, the problem is that if you use it it needs to be with an accredited school, what happens if your child wants to go to a trade school and you have the money in the 529 but it is not accredited you can not use it with out being taxed, oops.

If you use cash value life insurance and start at a very young age of investing your children could have a large college tuition fund by the time they go to school, the money in the insurance policy grows tax free and when you borrow from it the money is tax free as long as the policy is in force. When the kids graduate and are adults they can keep the insurance coverage on themselves and protect their family from having funeral bills when they pass away.

This is not really complicated but their is more to it. I suggest that if you have children and you are concerned about your children’s wealth it is important for you to talk to a financial advisor who has an insurance license or work with an insurance agent  and ask about the benefits I have addressed in this article.

Please do not take this as legal advice you should check with an attorney and your accountant for any changes in the laws.

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8 Responses to “Death, college and money”

  1. Anytime you put together your money with any Government program, it’s NOT a good thing. Put away, either in cash, silver, or gold and lock it into a safe….lock it away from the Government and hide it the best you can.

  2. What a sad, sad, story. I am like you, I don’t even want to ponder the “what if” even though I know I should. I can’t even do it for myself, never mind for my kids. I will try.

    Lisa McLellan
    Babysitting Services, Nanny Services, and Nanny agencies

  3. Mike Norris says:

    Those are good points Dale. I have a daughter that just graduated and even though she had money coming in to help pay for school I still had to fork over a lot of money.

    Mike
    http://www.ColumbiaSafetyProducts.com

  4. Dewayne Chriswell says:

    It sounds like a very reasonable alternative, having the money with the options of how you’d like to responsibly use it. Thanks,

    http://dewaynechriswell.com

  5. Thanks Dale. I am definately intersted in this type of plan. I just have to get off my butt and talk to an insurance agent.

    Tim Van Milligan, helping you Make Money Online, God’s Way!

  6. Hi Dale,

    What excellent points about the wisdom of preparing for a child’s education. I am a strong believer in Life Insurance as well, having been widowed at a young age. Interestingly enough I sought out training and am additionally a Grief Recovery Specialist. Singles often need to take care of that emotional side before they can really invite last love into their lives.

    Your story of Shirley really touched me. As well as that there was a loving community of support around her to take up a collection so her funeral expenses could be taken care of.

    Happy Dating and Relationships,

    April Braswell
    Christian Dating Expert

  7. Very sorry to hear about what happened to Shirley.
    Her fanily’s story is a terrible tragedy.

    As far as insurance & investing, it’s so hard to find a reputable agent who doesn’t prey on you by trying to shift your money around to make themselves more commissions.

    All I can say is research, ask a lot of questions & do more research.

    Michael
    The Success Secrets

  8. Peggy Larson says:

    I think you have to be diligent about this and have a good plan going in to any of these programs or products. I agree with MD Walker in that it can be difficult to find an insurance agent to work together with in a win-win situation.

    Schooling is expensive and parents should think about it from the start of the pregnancy.

    Peggy Larson
    Quilting – Colors and Fun!