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With college costs continuing to skyrocket, you need to plan earlier and more carefully than ever to achieve your college-savings goals. Meeting this challenge requires a disciplined approach to saving and investing. But having a smart investment strategy is just one part of a sound college-funding plan. You also need a smart risk management strategy to ensure that your college savings goals will be achieved, even if you're not able to complete them due to illness, accident or death.

Saving and Investing for College. Federal- and state-sponsored college-savings programs are increasing in popularity because they let you save and withdraw tax-free. Education IRAs, now called Coverdell Education Savings Accounts, let you contribute $2,000 annually per child, but phase out contributions at higher income levels. Section 529 plans, a more flexible option, permit much larger contributions (over $200,000 per beneficiary in most states), and generally have no income restrictions.

Permanent life insurance is another option to consider because it, too, allows you to save and withdraw tax-free, while also providing the protection you should be building into your college savings plan (see below). Withdrawals, and loans, which are also subject to interest charges, can lower the ultimate death benefit. Because of the insurance component, your costs may be somewhat higher than with, say, a Section 529 plan.

Protecting Your College-Savings Plan. Protection products form the foundation of a sound college-funding program, ensuring that your college-savings plan won't die or become disabled if you do. Life insurance can complete a college-savings program that hasn't matured, while disability insurance can help make sure that you can continue to set aside money for college, even if you're unable to work for a period of time.

Remember, a college-funding plan without insurance is just a savings and investment program that can die or become disabled when you do.

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