Life Insurance Vs. 529

Rusty says an insurance salesman told him a life insurance policy is better for college savings than a 529 because the kids can use it for anything rather than just college. Is that true?

QUESTION: Rusty in Georgia says an insurance salesman told him a life insurance policy is better for college savings than a 529 because the kids can use it for anything rather than just college. Is that true?

ANSWER: Of course he did. He’s an insurance salesman.

Yeah, it can be used for anything if the kids don’t go to college, but there won’t be any money because you saved it inside of a life insurance policy, and that sucks. You’ll have almost nothing compared to what you would have had if you’d saved it in a 529.

No, I think the first thing I’d do is brainwash my kids that they’re going to college. “This is a college fund. This is a college fund. This is a college fund,” and we talk about it all the time over and over. That’s very important. It’s a big part of the program.

But no, you just had an insurance salesman trying to sell insurance is what you had, so be used to that. It’s kind of part of the program.