VUL & College Planning

Variable Universal Life (VUL) has plenty of applications for the modern investor and one of the more interesting uses is as a College Planning Tool.

Variable Life plans combines tax advantages with flexibility in deposits and the opportunity to earn higher potential returns than fixed income alternatives that many parents and grandparents rely on.

Best of all there are no Congressionally imposed limits on how much you can invest, providing suitability requirements are met.

NON-MEC Classification

If the policy is properly established and maintained as a non-modified endowment under IRC section 7702, the policy's cash value build up (by virtue of the underlying sub-accounts) and can be accessed through loans and withdrawals 100% income tax free based on current tax laws. 

Hence, this could potentially serve as a source of tax free dollars, which in turn, could be utilized for paying tuition expenses.

If you have ten (10) years or more before your beneficiary heads off to college, a VUL could help offset the higher costs of higher education and, best of all, distributions will not increase your personal marginal tax bracket.

What others are Saying

Saving For College The Smart Way. "Variable life can make more sense than a large (taxable) custodial account. You'll save taxes-and, as the owner of the policy, you'll retain control of the money indefinitely. Furthermore, colleges don't look at the cash value of a parents life insurance when determining the child's eligibility for aid."

Profitable Investing, October 1996
Richard Band

"Clients who repeat the old saw 'buy term and invest the difference', as well as scores of other including business owners and couples saving for their children's educations are prime candidates for variable universal life policies."

Investment Advisor, December 1993

Action To Take

Click HERE to obtain Variable Life College Funding information

For Faster Service Call 1-800-480-7526



Home.gif (1460 bytes)

Copyright 1998 Fielder Financial Management, LTD.
All Rights Reserved.

Securities offered through Fortune Financial Services, Inc. member FINRA, SIPC.  Fielder Financial Management, Ltd. not affiliated with Fortune Financial Services, Inc.  Mark Fielder, Financial Professional, CA. Insurance Lic. # 0690576.

Disclosure:  For more complete information about variable life, including charges and expenses, obtain a prospectus by calling 1-800-480-7526. Read it carefully before you invest or send money. Investment return and principal value of an investment will fluctuate.  An investor's units, when redeemed, may be worth more or less than their original investment.  Consult your tax advisor.  Loans and withdrawals, in most cases, will reduce the cash values and death benefits associated with the contract you own.  As a result, you should carefully examine the impact of such activities prior to implementing.  Read the prospectus carefully as it will accurately describe the impact of loans and withdrawals for the product or program in question.