Between tuition costs, fees, services, housing, meals, books, etc… college is only getting more expensive! From 2005-2015, college tuition has increased a total of 42% (for in-state college tuition only, this does not calculate other costs). The average 529 savings plan may simply not be enough to cover these expenses. Continue to read how to use life insurance to supplement college and tuition costs and grow your IUL sales.
How do I calculate the cost of college?
Rule of Thumb:
A good rule of thumb is tuition rates will increase at about 2x the general inflation rate. If you look at different periods in the last 20 years, the average annual overall tuition rate increase has been between 6-9%. So if we used 8% that means the cost of college will double every nine years! So if a child is born in 2016, the cost will be more than three times the current rates. See the link below for an online calculator:
Clients who would benefit the most from this type of supplemental planning are:
* Need Life insurance protection
* Have young kids (young is a relative term, but the younger the better being COI’s are less and have more time in the policy)
* Prospects who are concerned about college costs
* Looking to supplement 529 Plans or Coverdell Plans
* Those who have a dual need for supplemental retirement money down the road
Life Insurance or 529 Plan for college tuition savings?
(I know you have been waiting for this section!)
IUL vs. 529 Plan
•Lack of Flexibility-for “qualified education expenses" only
•Market Risk- volatility
•Financial Aid- will have to be reported on FASFA (lowering chances of financial aid)
•Cost-state specific –include account maintenance, management, and underlying investments in plan
•Flexibility- No restrictions on how you use cash
•Risk- No market risk -protect on downside
•Financial Aid- Life insurance will not reduce your financial aid
•Cost- COI’s, surrender charge (goes away), and admin charge
CLICK HERE for the free financial advisor guide and get started today!
For more information on this sales idea please contact me today at 703-554-1175 or firstname.lastname@example.org