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Sounds terrible to me. Term only pays out in death so would be useless, so by process of elimination that means your planner is talking about whole life. Which is little more than a ruse to separate you from your money. I would fire any planner who suggested it but that’s just me. Is your planner a fiduciary?
The research group at my company looked into this because some advisors claimed it was a good strategy. Results: not an optimal way to save for college. Stick to the 529.
Interesting perspective. I haven’t heard of this before and just set up 529s for my kids. I always get concerned when I hear life insurance that the perspective of the advice is driven by the comp of the FP (not that this is the case here, but has been the case in conversations I have had in the past). Would love to hear other perspectives.
My wife’s grandfather bought her a whole life policy when she was a kid that her parents maintained because it was a gift from grandpa. I killed it right after we got married, well not immediately right after... Logic makes no sense. Life insurance is there to replace future earnings your dependents are counting on. Your kid has no dependents. Your financial situation improves when your kid’s expenses go away. Numbers make no sense. If you want to save money... buy CDs, treasuries, stocks, real estate, whatever. That’s what the whole life policy is going to do except only after they take their fees and their other charges and risk adjustments and commissions.
Sounds tome like you need a different/better financial planner ASAP
D: Do the analysis? What’s the post-expense cash on cash return of whole/universal life vs an equivalent term policy + 529?
Only other option should be a Roth/backdoor Roth depending on your situation. Your advisor is in search of fees not your best interests.
Does your 'financial planner' work for a life insurance firm and make commission by selling you life insurance? If so I would find a fiduciary financial planner.