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September 30, 2018 at 02:01 AM
As the 2018 Life Insurance Awareness Month draws to a close, financial services professionals are asking the same kind of question they ask at the end of every awareness month, or week, campaign: How do we make every month an awareness month?
Here’s a look at how one financial professional, Travis Scribner ,goes about trying to do that.
Travis Scribner celebrated Life Insurance Awareness Month roughly the same way he spends every month: by making families aware that they can use permanent life insurance as a vehicle for paying for college.
Scribner is a financial advisor and managing partner in the Las Vegas office of WestPac Wealth Partners, a wealth management firm
(Related: How to Find the ‘Hidden Rich’ in Your Area)
He also hosts a weekly radio show, “Las Vegas Money Resource.”
He talked about how he markets the idea of using life insurance for college funding in a recent interview.
What does life insurance have to do with college funding (for students with living parents)?
A traditional whole life, universal life, indexed universal life or variable universal life policy pays the policyholder a dividend, fixed interest, or variable interest depending on the policy type
The rate of return may be lower than for a 529 college savings plan, but the parent can borrow against the policy value to pay for college, and the parent owns the policy and controls the cash, Scribner said.
The family can do whatever it wants with the cash, Scribner added.
When a family uses a 529 plan to save for college, the family may run into problems with using the cash if a child skips college, or a child wins a big scholarship that sharply reduces the cost of attendance.
Using permanent life insurance policy as the funding vehicle eliminates the headaches related to uncertainty about what babies who are learning how to chew on their fingers today will be doing 18 years in the future.
What’s the best target for marketing life-based college funding arrangements?
Scribner aims his marketing at upper middle class and mass affluent families that can afford to spend at least about $300 per month on additional life insurance.
Scribner focuses mainly on explaining the existence of the life-based funding arrangement, and how the arrangements work.
“With the vast majority, it’s never even been discussed with them,” Scribner said. “They are very receptive to it.”
