With the rising cost of higher education, it’s important to prepare for your child’s future now and have a plan for college or other schooling. Two popular ways to do so are the 529 Plans and the Gerber Life College Plan. Let’s see how these two college plans compare.
A 529 plan is a tax-free college savings account.
The Gerber Life College Plan is an individual endowment policy that matures in 10 to 20 years (you choose the duration), pays a lump-sum upon maturity, and provides adult life insurance protection.
Money put into a 529 Plan can be used only for qualifying educational expenses, which include tuition, fees, books, and room and board at accredited schools. The Gerber Life College Plan provides flexibility by letting the student use the payout funds for college or technical school or anything else, without limitation.
In terms of risk, the rate of return on 529 Plans is tied to the stock market. This offers the possibility of greater returns than the Gerber Life College Plan, but also means greater risk if the stock market goes down. The Gerber Life College Plan offers guaranteed growth that isn’t impacted by the stock market. You know exactly how much money you’ll have at maturity, assuming that all premiums are paid.
With a 529 Plan, if the unexpected happens to you before you’ve finished your planned contributions, your child is at risk for not getting all of the money to fulfill the planned goal. With the Gerber Life College Plan, if something happens to you before your policy reaches maturity, your child as beneficiary would receive the payout in full, regardless of how much you’ve actually put in.
If you’d like to discuss kids’ college funds and whether a Gerber Life College Plan could be right for you and your family, we’re here to help. Just call us at 1-800-704-2180.
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We understand you want to give your child every advantage. The Grow-Up® Plan is a simple, budget-minded way to start for children ages 14 days to 14 years. For as little as $1 a week, you can give your child a lifetime of life insurance protection with plans starting at $5,000. Your decision today will help your child be better equipped for adult responsibilities tomorrow.