Some advisers recommend it to clients, but others want the idea banned.
Parents worried about how they will afford the soaring cost of college for their children are being steered by some financial advisers in a surprising direction: life insurance. Life insurance that carries a cash balance that can be pulled out and used to pay for higher education offers tax advantages over the popular Section 529 college savings plans, according to some advisers. It is also a better way to pay for college because the assets aren’t counted in the calculations used to determine financial aid eligibility, they contend.
Jeremy Turner, an adviser and president of Safe College Funding LLC, said that he steers about 10% to 15% of his middle-income clients in the direction of life insurance to plan for college costs. “It’s not a one-size-fits-all ap-proach,” he said. “It takes some crafting to make sure it’s the…
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