Besides being happy and healthy most parents also want their children to be financially secure.  One path to financial security is a good education.  Education and in particular college education is in a word, expensive and rising by approx 5% a year well into the foreseeable future. ​ Most parents of moderate means cannot afford college tuition and the associated housing and material costs.  While scholarships, grants and other forms of financial aid are available, most families do have to pay a considerable amount out of pocket

There are a few options to save for college, 529 plans being the most popular followed by traditional savings accounts.  While both are good ways to save another option is to consider Indexed Universal Life Insurance.

Here is a chart detailing the features of each

Savings Plan

Indexed Universal Life Insurance	Traditional 529 Plan	Savings Account
Earns interest and accumulates cash value. Provides death benefit	Earns interest. No death benefit	Earns interest at the lowest rate. No death benefit
Indexes to the S&P with downside protection	Subject to the stock market; potential for loss as market drops	Fixed interest rate, usually the lowest
Living Benefits; access to policy value for a health emergency	No cash value access for emergency health issues	Funds fully accessible
Disbursed funds can be used for any purpose	Disbursed funds can only be used for education; no other use	Funds can be used for any purpose
Distributions are tax-free	Fund gain is taxable	Fund gain is taxable
Funds are not included in Financial Aid analysis.	Funds are included in Financial Aid analysis; financial aid award is potentially reduced by how much is in the 529 plan	Funds are included in Financial Aid analysis; financial aid award is reduced by how much is in the savings account
Policy accumulates value past the college expense payments	Fund depletes after college payouts	Funds, if not entirely withdrawn, continue to accumulate interest
The policy allows for the withdrawal of cash value for personal needs	NA	Funds available

This blog is not intended to impart Tax, Financial or Legal advice.  Contact me for specifics of your particular situation. You don't know what you don't know.