college funding hero

Help college happen with life insurance 

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A source of funds that’s often overlooked

With college costs continuing to rise, it’s never too early to consider opportunities for possible funding. For parents or grandparents who want to help a child afford college, there’s an option that can be offered right now.

Life insurance can help supplement tuition expenses

The main reason for buying life insurance is to provide loved ones with a death benefit that’s generally income-tax-free. This death benefit can be used to help pay for college expenses or other needs.

But that’s not all. Because fixed index universal life (FIUL) insurance also provides accumulation potential, it can be a source of funds that can be accessed through policy loans or withdrawals.1

FIUL has a place in many college funding strategies.
FIUL has a place in many college funding strategies

Advantages of FIUL as part of a college funding strategy

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Tax advantages

FIUL offers a powerful combination of three tax advantages:

  • A generally income-tax-free death benefit
  • Tax-deferred accumulation potential
  • Income-tax-free loans and withdrawals1
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Flexibility and control

The policy's available cash value has the ability to be accessed for any purpose the policyholder chooses. So if plans change down the road and the child does not go to college, the policyholder can access the cash value for other needs.

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No eligibility requirements

With life insurance, there are no complex eligibility requirements or income limits to consider. And under current rules, the money received from policy loans generally won’t affect the student’s eligibility for other financial aid.2

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Need more information?

Contact a financial professional or download the Allianz Life Pro+® Advantage Fixed Index Universal Life Insurance Policy product brochure.

1 Policy loans and withdrawals will reduce the available cash value and death benefit and may cause the policy to lapse, or affect guarantees against lapse. Withdrawals in excess of premiums paid will be subject to ordinary income tax. Additional premium payments may be required to keep the policy in force. In the event of a lapse, outstanding policy loans in excess of unrecovered cost basis will be subject to ordinary income tax. If a policy is a modified endowment contract (MEC), policy loans and withdrawals will be taxable as ordinary income to the extent there are earnings in the policy. If any of these features are exercised prior to age 59½ on a MEC, a 10% federal additional tax may be imposed. Tax laws are subject to change and you should consult a tax professional.

2 Withdrawals from the cash value do generally count as income when applying for other types of financial aid. Please see the chart on the next page and your university or college for further information regarding eligibility requirements, as they may vary by school.

The death benefit is generally paid to beneficiaries income-tax-free.

There is no guarantee the policy will earn sufficient interest to support a loan strategy.

It is important to manage policy values carefully when taking out loans to avoid policy termination and a lapse in coverage. 

FIUL is subject to health and financial underwriting.


Guarantees are backed by the financial strength and claims-paying ability of Allianz Life Insurance Company of North America.

Products are issued by Allianz Life Insurance Company of North America, PO Box 59060, Minneapolis, MN 55459-0060.

Product and feature availability may vary by state and broker/dealer.