Pay now & learn later: here are two innovative ways to finance college costs

Black Enterprise, Feb, 1996 by Juliette Fairley

For example, Brown says, during the first 10 years of your variable universal life policy, if you want to borrow money against the balance accrued, you will pay a 6% interest rate. However, the money in your life insurance policy is continually accruing a market interest rate of 4%, so your net interest cost would be 2%. Brown adds that if the policy is more than I 0 years old, you would pay a 4% interest rate. You don't have to pay back the loan as long as the policy stays in force," he says. "The loan is subtracted from the death benefit."

Of course, the terms and interest rates of loans differ from policy to policy, and some insurance companies make borrowing easier than others.

Brown says, "It's important to work with someone you can trust. Some people will be uncomfortable about the stock market, and so they should stay away from variable life insurance. But it offers the greatest potential for growth because the stock market gives you the greatest return."

INNOVATIVE WAYS TO PAY FOR COLLEGE

Alabama Massachusetts Pennsylvania Prepaid Affordable Education Financing Tuition Account College Tuition Authority Program 800-252-7228 800-449-6332 800-440-4000

Alaska Michigan Texas Advance College Education Trust Tomorrow Fund Tuition 800-MET-4-KID 800-252-5555 907-474-7469

Ohio Virginia Florida Tuition Trust Authority Prepaid Tuition Prepaid College Prepaid Tuition Program Program Program 800-792-5626, ext. 2 800-552-4723 800-233-6734