Thinking about kids’ college education and want to save money? Let’s compare Two best products 529 with IUL (index universal life insurance)

529IUL

529 with IUL (index universal life insurance). Every parent nightmare is saving for their kid’s college education. If you as parent, thinking about kids’ college education and want to save money? Let’s compare Two best products 529 with IUL (index universal life insurance)

I’m going to tell you now about one of the greatest financial tools you will ever see or hear about so you can decide whether an IUL or 529 is better for this purpose.

529IUL
How this works?529 plans work for some, they’re not the safest education savings option availableIndex universal life insurance offers a savings plan that has fewer restrictions and can be a safer option for your child’s future.
MARKETSome 529 plans also have market risk, which means that you could lose money if the market decreases.Index universal life insurance doesn’t have any of those problems. There is also no market risk. You will gain interest when the market is up but won’t lose money when the market is down.
TAXWith 529 accounts, you will likely have to pay taxes on the money you take out.(if you don’t use it for education)You will not have to pay taxes on the money that you withdraw from the policy, and the interest that you earn is tax deferred
PENALTYYou’ll also have to use the money for educational purposes only or pay hefty penalties if you’d like to use it for anything else.This savings plan does not have any restrictions on what you can or cannot use the money for; this means that there aren’t penalties for using it for costs other than education, and you can access the cash value whenever you’d like.
FINANCIAL AIDsavings in a 529 may impact eligibility for financial aid when the time comes.IULs are non-declared investments so no impact on financial aids
LIVING BENEFITSThere are no livings benefits. Living benefits are chronic/critical/Terminal and Long-term careIUL is a relatively new type of whole life insurance that also has living benefits,
More input
Tax-Deferred Growthyesyes
After-Tax Contributionsyesyes
Generally Tax-Free Death Benefitnoyes
Avoids Probate at Deathnoyes
Can Be Excluded from Taxable Estateyesyes
10% Penalty If Not Used for Schoolyesno
Self-Completing Fundingnoyes
529iul
Countable Asset of Child (Financial Aid)nono
Countable Asset of Parent (Financial Aid)yesno
Parent Controls Product/Vehicleyesyes
how to getA 529 plan offers tax benefits to help you save money for your kid’s college education. 529s typically offer an immediate tax deduction and income tax deferral and some don’t (depending on the state you’re in). Most require that the money be spent on educational expenses or there will be a tax penalty. Most importantly, when the kid finishes school, the money is normally used up.An IUL (indexed universal life insurance policy) for a child gives you the opportunity to leverage a small amount of after-tax money while your child is a child into a LIFETIME of tax-free financial benefits. To maximize the benefits for college, the policy should be bought ASAP after the child’s birth. There is no medical exam needed; the child just needs to be born healthy. These policies are issued very quickly.
How IUL (index universal Life Insurance works ?

When the index goes up, your account will earn interest. When the index goes down, you will be protected by a guaranteed floor of 0%. Your cash value can NEVER go down because of the market, making this a very safe place to put money. To pay for this floor, there will be a “cap” to how much of the market growth can be credited to your account. If the cap is 11.75% and the market goes up 10%, your account will earn 10%. If the market goes up 20%, you will earn 11.75%. If the market goes down, you will earn 0% and your cash value will stay the same. With a cap of 11.75%, your cash value will grow somewhere between 0 and 11.75% every year, after the cost of insurance has been deducted.

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