New Beginnings: Life Goals

Tom is 36 years old with a newborn son on the way. He is nervous to become a father and wants to ensure he is financially prepared so he can provide his son with the life he has envisioned. While talking with his Financial Professional, Allison, Tom learns about the increasing cost of higher education. Concerned with how these costs may impact his long term financial plan, they explore ways to cover these future expenses.

Allison discusses with Tom the benefits that life insurance can offer beyond a death benefit. She explains to him how permanent life insurance offers a savings component known as cash value. The funds paid into the policies cash value account accumulate on a tax deferred basis and if needed, Tom can borrow from the cash value up to the principal without triggering a taxable event. Life insurance can be designed for college funding which could provide a solution to Tom’s concerns about his son’s future education costs.

While Tom’s son is applying to colleges, he is offered a full scholarship to his top school. With his tuition now fully paid for, the cash value that has accumulated in the life insurance policy which was intended for his son’s education is no longer needed. During his annual review meeting with Allison, she informs him that he can repurpose the funds as supplemental income throughout his retirement or they can be used to cover any miscellaneous costs such as healthcare expenses that may arise in the future.

Tom is grateful to Allison for her recommendation to purchase life insurance. The policy not only provided him with the confidence that he was financially prepared to take care of education costs but it now gave him the additional financial cushion to enjoy his retirement years with less concern of any future health cost that may arise.