VUL For College Funding? No

To The Editor:

I am writing regarding the article, “The VUL Option For College Funding Might Be Right For Your Clients,” in the Aug. 25 edition of National Underwriter.

The primary purposes of life insurance are: economic protection, business planning, estate planning, wealth transfer or philanthropic desire. In my view, a strong case cannot be made for using life insurance as a college funding mechanism, for the following reasons:

1. Costs of insurance.

2. Insurability issues.

3. Financial aid issues vs. 529 plans (the statement that 529 plan assets are “not excludable for financial aid purposes” is incorrect).

4. Tax benefits vs. funding alternatives (ESA, 529, Gifting).