April 25, 2014
When investors pulled out of 529 plans during the economic downturn, insurance companies shifted their marketing to capture a growing portion of the college savings market. The insurance products often sold for college savings are Whole and Indexed Universal policies. While the guaranteed returns and/or principal protection are enticing to risk adverse investor, the policies are expensive and most often “take at least eight to ten years to accumulate enough cash to pay for college.” When 40% of permanent policies are terminated within ten years, and in most cases receive less cash out than premiums paid, investors need to be sure they are educated before they decide to use life insurance as a tool to save for education. For a more in depth analysis, follow the link to the full Wall Street Journal Article.