Acker Financial

One of the most amazing things about kids is that they are all potential. Parents often dream of who their children may grow up to be, and what they may accomplish along the way.

For their part, the kids have big dreams too, whether that means becoming a fireman, a doctor, or even the President of the United States.

Dreams are amazing, and when it comes to children’s futures, the possibilities are amazing. Still, in the back of our minds as parents, the cold reality sets in that in order to enable our children to reach their dreams, they are going to need some help from us.

Every day, we hear the news about the rising costs of higher education and the ever-expanding student loan crisis. Do not fear, however, as most of the hype is merely designed to garner page clicks and spur political contributions.

The truth is that the price of higher education is surprisingly within reach, and there are products on the market to help parents provide financial support for their kids educations with minimal contributions. In fact, there are three such products available.

The first product is the ever-so-popular 529 college savings plan. This plan allows parents to make contributions which can lower their income tax bill, and allows the principle to grow over time, resulting in a cash account for the kid when he is ready to attend college.

The downside to the 529 plan is that there are fees, and there are tax ramifications if the funds are accessed for non-educational purposes, such as if the kid decides not to go to college.

The second product is a cash value life insurance policy, such as an indexed univeral life, or a whole life insurance policy. Several life insurance companies and products offer robust cash value growth, and the cash value does not count as an asset against a student’s financial aid eligibility. Furthermore, the uses of the cash value are flexible. They do not have to be used for educational expenses, or any specific expenses.

However, the disadvantage of cash value life insurance is that the cash value growth can be limited in the early years of the policy. Cash value life insurance is a great product over the life of the child, but using such a policy for college funding requires careful planning when it comes to face amounts and monthly premiums.

The final product is a college savings plan from Gerber Life Insurance. This product allows parents to contribute as little as $10 per week, has a guaranteed cash benefit payable to the child when he turns 18, will pay the benefit to the child at any time if their parent passes away, and will be paid even if the child decides not to go to college.

For a realistic look at the costs of higher education or trade school, and possible strategies for covering these costs, contact us today at Acker Financial. There are multiple approaches to this challenge, and we’d love to help you find the right one for you.