College Planning Using Cash Value Life (CVL) – Does it Work? (7702 Update)
By: Roccy DeFrancesco, JD, CAPP, CMP
Click here to download my updated 14-Page White Paper which has several examples of when CVL for college planning works and when it doesn’t.
The conclusion of my past white paper on this subject is that CVL doesn’t work for college planning. To my surprise, my conclusion from the updated paper I just published is that IUL (Indexed Universal Life) can actually work for college planning (the caveat is that you have to use the right policy and it needs to be designed properly (something most IMOs are not interested in)).
Instead of writing a newsletter, I’m inserting below the executive summary from the paper.
1) My old paper on using cash value life for college funding came to the conclusion that doing so is a mathematical loser in all fact patterns but one (that one is when the policy is overfunded by a parent not only for college planning but also for their own retirement).
2) This updated paper has a different conclusion. That conclusion is if you are using the “best” IUL (Indexed Universal Life) policy in the industry, it can work for many students if funded and designed properly.
3) When presenting IUL to clients for college planning it is a must to present both the pros and cons of doing so (don’t just sell off an illustration the client doesn’t understand).
4) The “best” IUL policy in the marketplace right now took the changes to Section 7702 and designed the most client-centered policy in the marketplace. It is only for that reason that IUL can be a viable college-funding tool.
5) If you use the IUL policies that most advisors are currently using, IUL is still a mathematical loser for college-funding.
6) Policy design is still critical (increasing death benefit at the MEC minimum death benefit).
If you want to offer IUL to clients as a viable funding tool or college planning, the only way to do so is to start using the IUL policy I used to generate the numbers for this paper.
If you would like to sign up for information and to get licensed to sell the best 7702 IUL policy in the industry today, click here.
Client White Paper
I know many readers are going to be excited about the fact that I now believe IUL can be a viable tool for college planning (in the right circumstances). To help advisors communicate the value of IUL as a college funding tool, I am creating a client version of my white paper.
If you would like to use my client white paper on how IUL can work for college funding (the paper will use me as the 3rd party expert explaining the subject matter) click on the following link: https://advisorshare.com/college-planning-white-paper-consumer
The paper uses me as the author/3rd party expert so advisors can piggyback on my credibility instead of the paper looking like a sales piece coming from an advisor.