The purpose of life insurance is to provide a sum of money at the death of the insured. The death benefit or a sum of cash paid after your death distinguishes life insurance from other investments or a savings account. When you use life insurance as part of your college-funding plan, you can provide funding for your child's college education in two ways. The first and perhaps obvious use is the death benefit, which can be used to pay for your child's college education should you die prematurely.

However, statistically speaking, you probably will be alive to see your child through college, in which case you can still use life insurance as part of your education-funding plan - - when you choose a cash value life insurance policy.

Using Cash Value Withdrawals Having a cash value life insurance policy is the second way of reaching your college-funding goal. When you pay premiums on a cash value life insurance policy, some of your money is applied towards the policy cash value. Cash values accumulate and can be used during your lifetime via withdrawals and/or policy loans.

The portion of your premium payment that is applied to cash value is invested by the insurance company either by its direction or at your direction, depending on the type of policy. Positive investment returns increase the cash value. You are not subject to taxes on the growth in cash value until you withdraw the cash value or cancel (surrender) the policy. It is possible that you may be able to withdraw the cash value and not be subject to income tax on the withdrawal.

When the time to pay college tuition arrives, you might withdraw some or all of the cash value from your policy. The amount you can withdraw is generally limited to a percentage of the cash value and varies by policy and company. You may be able to withdraw from your cash value and still keep your insurance in effect to provide a death benefit at your death. It's a good idea to leave enough cash value in the policy to maintain the policy and cover the policy fees. Cash value withdrawals may reduce the death benefit.

Using a Policy Loan

Cash values can be borrowed against using a policy loan. Policy loans are allowed under the terms of your insurance contract and are not affected by your current financial position. In other words, you don't have to undergo a credit check or a bank loan approval process for a policy loan. When you take a policy loan, the check you receive comes out of the general funds of the insurance company, not your cash value. Your policy cash value serves as the loan collateral. The interest rate for a policy loan is known in advance and may be lower than that on a bank loan

Some policies allow borrowings at an interest rate only slightly higher than the rate being credited to cash values. With some policies, the loan interest rate charged equals the rate credited to cash values, for a zero net cost loan. There are a few things to consider when borrowing money from your insurance policy:

• If you die with an outstanding policy loan against your account, your death benefit is reduced by the amount of the outstanding loan balance.

• Interest accrues on the unpaid loan balance. If you choose not to repay the loan, the accruing interest could erode your cash values and result in a policy lapse with some types of policy.

Cash value withdrawals and policy loans are not exclusive events. You can use a combination of withdrawals and loans to maximize the tax-free cash withdrawal benefits. You might choose to make cash value withdrawals up to the amount of your policy basis and then take a policy loan. In insurance terms, this is referred to as "surrender of basis and switch to loan."

Example: Let's say you have a son you are putting through college. You own a cash value policy that you bought just after he was born, and you are considering accessing your cash values to pay this year's tuition. The first thing you might do is to make a tax-free withdrawal of cash value from the policy equivalent to the amount of premiums you have paid into the policy. After you withdraw to your basis, you take a policy loan.

It is important to remember that withdrawals and loans will reduce the available death benefits and policy values. Withdrawals beyond basis maybe taxable income. Excess and unpaid loans may cause the policy to lapse. If a policy lapses, unpaid loans are treated as a distribution for tax purposes.

Financial Aid Considerations Under the federal financial aid formula, assets are grouped into two categories: assessable and non-assessable. Life insurance policies fall into the non-assessable category. In other words, the value of your cash value life insurance is not counted as income or assets in the financial need calculation. The amount of federal financial aid your child is eligible for is not reduced because you have life insurance containing cash value.

The following types of life insurance contain cash value and may be used for funding your child's college education.

• Whole life
• Variable life
• Universal life
• Variable universal life*

Remember to consult an insurance agent or financial advisor before you make any decisions about this strategy.

Nicolas T. Abrams, CFP ®, Investment Advisor Representative. *Securities and investments advisory services offered solely through Ameritas Investment Corp. (AIC). Member FINRA/SIPC. AIC and AJW Financial Partners, LLC are not affiliated. Additional products and services may be available through Nicolas T. Abrams, CFP® or AJW Financial Partners, LLC that are not offered through AIC.

Variable products are subject to investment risk, including possible loss of principal. Before investing, carefully consider the investment objectives, risks, limitations, charges and expenses of the product and its underlying investment options. This information can be found in the product and investment option prospectuses. Copies are available from my office. Please read carefully before investing.

On the first and third Tuesdays of each month, Anike Robinson and Hasna Jones host an “art party” at Takoma Station Tavern. Well, it’s more than just a party. The two artists also inspire and provide art instruction and supplies to their guests. “Leading people step by step in an entertaining space as they create their own work of art is very rewarding to me,” says Robinson.

The two sisters from another mother have vowed to make artists out of every one who buys a $25.00 ticket for two hours of creative fun at Takoma Station Tavern, 6914 4th Street, NW in Washington from 6:30 p.m. to 8:30 p.m. “We provide everything , all people have to do is arrive,” says Jones. The parties are every other Tuesday including Tuesday, September 1.

They call their operation Brews n Brushes DMV and model their business after a national chain in which they formerly worked. “The work was hard,” Robinson added, “but I found that not only could I share my love of art, but teach others to set themselves free.” 

The crowds are made up of date night and ladies’ night out folk, birthday girls/boys, and individuals who roll in on their own to relax and create. To keep the evening positive, if someone says anything self-deprecating during the two hours of painting, music, drinks, and jokes they have to put money in a swear jar. “No matter how much they dance, joke, and/or drink, or meet new friends, people leave with a completed piece of art work,” continued Robinson.

Beside the Takoma Park Station, the owner/operators are looking for other places in which to meet. “We are interested in working with other local watering holes and bringing in fun, artistic crowds on slow nights,” says Robinson.

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The Port Of Harlem Gambian Education Partnership (POHGEP) won a grant from the Humanities Council of Washington, D.C.  to produce a program for the upcoming Humanities, Art, and Technology (HAT) Festival at St. Elizabeths.  The HAT festival will be part of the larger city-wide event Art All Night:  Nuit Blanche DC, which will feature art programs around the city Saturday, September 26 from 7p to 3a. 

POHGEP’s program, Washington, the Diverse.  Washington, the Inclusive, will be one of several presented throughout the city.  The R.I.S.E  Demonstration Center on the campus of St. Elizabeth’s will host several events including POHGEP’s program.

The POHGEP program will include:

Viewing of the House Maid. (There’s Hollywood, Bollywood, Nollywood, and yes, Gollywood.) Gambian producer and director Cherno Bubacarr Zaidi Jallow says the 90 minute film is significant because it helps “society understand that house maids are not slaves and must not be treated as such.” In the story, a wife loses her man to their maid. “The wife gives a lot of priority to going to the gym and other programs instead of sharing those moments with the husband and expecting the maid to take care of him because she pays the maid,” he adds. Participants will be able to chat with him via Facebook.

Afro and Latino. Erica Harding, producer of the film “On Our Land: Being Garifuna in Honduras,” will show the 20-minute film showcasing the Garifuna people of Honduras and Jonathan French will screen the slideshow “Unexpected Faces in Unexpected Places” that showcases the Afro-Latino communities he visited during several trips to Central and South America.

From Studio to Mansion: Making a Happy Place. Sherry Burton, founding principal designer of Kreative Ways & Solutions, LLC, will present an interactive interior design workshop. The certified Feng Shui designer will walk participants through the value of decluttering, choosing and matching colors that best complement the participant, and how to design multi-functional spaces. The workshop will spark the creativity of participants as they explore how to create their own happy spaces regardless of the size of their space.

Facebook Chat with Gambians. Participants will be able to learn a little about The Gambia, West Africa from Port Of Harlem Gambian Education Partnership (POHGEP) President Wayne Young. After a short slideshow the participants will engage in international cross-cultural Facebook conversations with at least eight teenage and young adult Gambians.

The Prince George’s County Department of Parks and Recreation is conducting a free, 12 week program, that teaches young men essential life skills as they get closer to adulthood. The 10 Things Every Young Man Should Know series is designed for boys ages 14 to 18, parents are encouraged to stay at each session, and dinner will be provided each evening. However, it is not mandatory to attend all 12 sessions, though it is strongly encouraged.

All participants must have a Maryland-National Capital Park and Planning Youth ID, which is free for Prince George’s County and Montgomery County residents. These are the dates and sessions:

The Coalition of Smarter Growth held its quarterly happy hour in Capitol Hill East, the neighborhood sometimes called Jenkins Hill, which is near the Sousa Bridge - - before crossing (from downtown) the Anacostia River in Washington, DC.  The advocacy group encourages the development of walkable neighborhoods.

Much of the focus was on the redevelopment of the new Southeast Boulevard that runs parallel to the Anacostia River. The Coalition advocates making the throughway less of a highway and more of a pedestrian friendly street. Alex Posorske, managing director of the group, says they are aimed at  “making the river a part of everyday life.”

Local politician Brian Flahaven added he seeks, “Streets that connect to the freeway and more housing that connect (people) to the waterfront.”  Both men say that by connecting existing Capitol Hill streets to the Boulevard will allow more housing and bring the River closer to the people.
 
However, Flahaven admits that it would be too costly to remove the CSX railroad tracks that run adjacent to the river to recapture all of the river's shoreline.  Nevertheless, the developers are planning to build Capitol Riverfront, a housing complex, at 1333 M Street, SE, on a piece of land on the River, east of the Navy Yard. The first of three buildings in the new complex will have 218 units, of which 19 are designated affordable units. The developer says 15 studios and one-bedroom units will be reserved for tenants making- $85,600 –which is 80 percent of the area median income of $107,000 for a family of four.  Four two-bedroom units will be set aside for tenants at 60 percent of the area median income or $64,200.

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Washington
The Underground Railroad in D.C.
CR Gibbs
Lamond Riggs Library
5401 South Dakota Ave. NE
Thu, Aug 20, 7p, free

Freddie Dunn Quintet
Kennedy Center Millennium Stage
Fri, Aug 21, 6p, free

DCTV's Community Day Festival
901 Newton Street, NE
Sat, Aug 22, 1p-6p, free

Family Night Poetry Open Mic
5814 Allentown Way,
Camp Springs, MD
Thu, Aug 20, 6p-9p, free

Chicago/Gary
Three the Hard Way - Art Exhibit
Reva and David Logan Center for the Arts
915 E 60th Street
now through - Sun, Aug 23

Harlem, New York
American Master Preview: Althea Gibson
The Schomburg Center
515 Malcolm X Blvd
Tue, Aug 25, 6:30p, free