indexed universal life insurance for kids

Discover how a CollegePLUS IUL from The Policy Shop helps parents grow college savings tax-free while providing future flexibility and protection. (How My Child’s CollegePLUS IUL Is Growing Tax-Free—And Why That Matters More Than Ever | INDEXED UNIVERSAL LIFE INSURANCE)

Why I Chose Tax-Free Growth Over Traditional College Savings Plans

As a parent, I want to give my son every advantage possible—especially when it comes to his education. But I also didn’t want to pour money into an account that was rigid, taxed later, or vulnerable to market downturns.

That’s why I chose the CollegePLUS Indexed Universal Life (IUL) plan through The Policy Shop. What stood out most? The power of tax-free growth.

With rising tuition and unpredictable markets, this plan lets me build a smart, strategic financial foundation that keeps more money in our pockets.

The Magic of Tax-Free Compounding

Traditional savings accounts and investment plans grow with tax consequences. Even 529 plans—while offering some tax advantages—can come with penalties if funds are misused.

But with the CollegePLUS IUL:

• My premiums fund a permanent life insurance policy.
• Part of those premiums go into a cash value account that grows over time.
• That cash value grows tax-deferred and can be accessed tax-free via policy loans when needed.

Our Numbers at a Glance

Here’s what our IUL looks like right now:

• Policy started at age 4
• Monthly contribution: $200
• Indexed to the S&P 500 (0% floor, ~10.5% cap)
• Projected tax-free cash value at age 18: $24,000+
• Can continue growing and be used for retirement if not spent

Why Tax-Free Growth Makes a Big Difference

Let’s break it down:

• No income tax on gains if structured properly
• No penalties if funds are used for something other than college
• Cash flow flexibility when tuition bills hit—or if they don’t

Here’s a quick comparison:

This tax treatment makes a massive difference in the total value your child ends up with.

A Financial Gift That Keeps Growing

My favorite thing? Even if my son earns a scholarship and doesn’t need the funds for college, the policy keeps growing—and stays in force for life.

He can:

• Use it to buy his first home
• Borrow against it to start a business
• Let it keep growing as a tax-free retirement asset

That kind of lifelong flexibility is something no traditional college plan offers.

FAQs – Smart Questions Parents Ask

Q1: How is the growth tax-free?

When structured properly, you can access your cash value through policy loans, which aren’t considered taxable income. The IRS doesn’t treat loans the same way as withdrawals (source: IRS Publication 525).

Q2: What if I can’t make premium payments later?

Most IULs offer flexibility. Once your cash value builds up, you can use it to cover premiums, pause contributions, or adjust the death benefit if needed.

Q3: Is the policy only useful for college?

Not at all! It’s a multi-use financial tool—college is just the beginning. Your child can use it for nearly any major life milestone.

Q4: What if I want to change the coverage later?

You can usually adjust premiums, increase or decrease the death benefit, and even add riders as life evolves. It’s a very customizable policy.

Final Takeaway – Building Smart, Tax-Free Wealth for the Next Generation

I’m not just saving for tuition—I’m investing in my child’s freedom and future. With the CollegePLUS IUL, I know I’ve set him up with a tax-smart strategy that adapts to life, not just college.

In a world where flexibility and efficiency matter more than ever, this is the move I’d make again without hesitation.

Want to Build a Smart, Tax-Free College Fund?

Let The Policy Shop help you explore how the CollegePLUS IUL could work for your child and your goals. Their licensed advisors can tailor quotes to fit your life—and your legacy.

👉 Book your consultation now