Can I use my life insurance to fund my children's education?

Cash value life insurance provides tax-deferred earnings and tax favorable withdrawals, or loan privileges, when the funds are needed for college. Also, the death benefit will provide a contingency fund for educational costs if one or both of the parents die prematurely. Traditional life insurance policies offer competitive returns with long-term, fixed-income investments. Variable life policies that invest in equity mutual funds may also provide a good inflation hedge if held for a number of years.