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Survey: 17% Of College Savers Use Annuities

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NU Online News Service, Oct. 7, 2003, 6:17 p.m. EST – Seventeen percent of U.S. households that are saving for college are putting some of the money in fixed or variable annuities, according to survey results released by the Investment Company Institute, Washington.

Insurance agents are the primary “sales force channel” for only 3% of the college savers, but independent financial planners, who often hold insurance licenses, are the primary advisors for 13% of the savers who use state-sponsored prepaid tuition plans and 14% of the savers who use state-sponsored 529 college savings plans.

Use of annuities in college savings programs ranged from 17% for families using taxable accounts to save for college to 24% for families using state-sponsored prepaid tuition plans.

Most families surveyed use bank savings accounts to save for college, and more than half use mutual funds and U.S. savings bonds.