Can You Use IUL to Pay for Your Child’s College?

What if you could fund your child’s college—tax-free—while protecting your family’s future? An IUL policy might be the smartest move no one’s told you about.

1. What If College Debt Didn’t Have to Be Your Child’s Future?

What if tomorrow your child got accepted to their dream school… but you couldn’t afford the tuition?

With college costs climbing past $35,000/year (and elite schools hitting $80K+), most families face a choice between raiding retirement savings or handing their kids soul-crushing debt.

But there’s another option: Indexed Universal Life insurance (IUL). It’s not just life insurance—it’s a tax-advantaged, flexible savings strategy you can use for college and more.

2. Yes, You Can Use IUL to Fund College. Here’s Why.

IUL policies grow tax-deferred cash value. When structured right, you can access those funds tax-free through loans to cover anything—tuition, books, even a car.

• No penalties
• No FAFSA impact
• No taxes on withdrawals (via policy loans)
• No contribution limits

It’s flexibility + protection in one smart plan.

3. What If I Can’t Afford to Fund an IUL Right Now?

You don’t need to start big. Many parents begin with $100–$250/month. It’s about starting early—not perfectly. Every year you wait is growth you lose.

4. What If I Wait Until High School to Start?

The earlier you start, the more your policy grows. Starting when your child is young gives you maximum compounding time. Waiting until high school? You’ll need higher contributions to catch up.

5. What’s the Real Cost of Doing Nothing?

Let’s compare:

Strategy	Tax-Free?	Flexible Use?	Market Risk?	FAFSA Impact	Contribution Limits
IUL	✅	✅	❌	❌	❌
529 Plan	❌	❌ (Education only)	✅	✅	✅
Savings Account	❌	✅	❌	✅	❌
Do Nothing	❌	❌	❌	❌	❌

6. Case Study: The Parent Who Waited Too Long

Sandra always meant to start a college fund. But life got in the way. When her daughter Chloe turned 17, they had nothing saved. Chloe got into her dream school—but needed $68,000 in loans. Sandra says, “I wish I had started with something.”

📊 7. The Math Makes It a No-Brainer

A well-structured IUL can grow cash value at 6–7% average annual returns—without risk of market losses. Combine that with tax-free access, and it often beats traditional savings and college plans.