It takes age and experience to sometimes realize the worth of things. The same goes with kids and money. As much as you might try to teach your kids the value of a dollar, it sometimes just doesn’t stick until they become old enough to realize how much energy it can take to make money.
So, if you’re considering what the best graduation gift is for your high school or college student, give them the opportunity to build lasting wealth with a Whole Life Insurance Policy – instead of giving them the common gift of cash.
Whole Life: Your College Students Financial Foundation
We’ve all read the stories about college grads entering the working world with significant debt. If it’s not school debt they’re burdened by then typically its credit card debt.
Using a Whole Life policy’s cash value to finance big expenses can prevent your child from borrowing more money than they can afford to pay back when they enter the working world.
When you use a cash value account, or banking policy, to finance anything of your choosing (including college tuition) you are borrowing from the insurance company at a lower interest rate than what a traditional lender would offer.
And exchanging a high interest rate for a low one isn’t the only positive thing about taking out a policy loan for college. When you borrow against yourself, you set the pay-back terms, and still continue to earn interest.
Having a Whole Life Policy function as a bank is a safe way to invest in your child’s future as well as your own future. If you have taken out a life insurance policy on your child, then they can initiate borrowing from the insurance company for their tuition, instead of you.
Regardless of who is borrowing what, be it parent or child, the policy loan is repaid on your terms. So, if times are difficult, or your child decides to take another direction in college, no one is burdened by wasted debt.
Give the Gift of Life Insurance
If you or your child missed the boat on using cash value life insurance to pay for college, it’s okay, there is still time to buy a policy and start implementing the living benefits – including using it to repay accrued student loan debt.
Instead of giving a lump sum of cash to your grad that could easily be spent and forgotten, give them an opportunity to build lasting wealth with a Whole Life Policy.
A cash value account is just as good actual cash, except better, because you are capturing money’s opportunity cost. Your Grad will be thanking you for their lifetime.