Funds for grandkids

[Fisher]

This is an excerpt of an email I rec'd from a client--

I will be a grandmother in August, 2024. I wanted to start a fund for her college education. I wasn't sure which way to go and was hoping you could offer some suggestions/advice.

What's the best play for this scenario? This client is not wealthy but she's not broke either.

 

[scagnt83]

20pay WL is a great option for this.

Strong Cash Value.

Premiums can contractually stop after year 20.

Or Premiums can continue if desired after year 20. (depending on carrier)

The ability to continue is nice, because the child can take over in the future once they are employed.

The advantage of this over a 529 plan, is that this can be used for anything.
If the child does not go to college, the funds can easily be used for something else.

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Guardian has a 20pay WL that works well for this and is specifically designed for child policies.

It offers an Index Rider on the S&P 500, for the possibility of a higher return vs. just the WL Dividend.

It also offers a Guaranteed Insurability Option. Allowing the adult child to purchase more life insurance, regardless of their health.

---

Mass also offers a 20pay. Penn WL can be designed as a 20pay.

Neither offers the Index Rider. And Guardians GIO Rider is stronger than both.

 

[rmhaire]

This is an excerpt of an email I rec'd from a client--

I will be a grandmother in August, 2024. I wanted to start a fund for her college education. I wasn't sure which way to go and was hoping you could offer some suggestions/advice.

What's the best play for this scenario? This client is not wealthy but she's not broke either.

What @scagnt83 says plus:

Life insurance on the grandmother first. To complete the fund if she's not around to complete it.

 

[scagnt83]

To piggyback off of rm. Make sure the parents are insured.

This policy alone will likely not be enough to cover all of the costs.

If parents are not around, it leaves a large gap.

Plus, the carrier is not going to insure a child for more than 50% of what the parent has in-force. (without asking for an exception and having a good reason)

 

[walthamny]

Also explain that when grandmother goes to sleep eventually someone has to pay the premiums and become owner of the policies while the grandchildren are minors

 

[Fisher]

20pay WL is a great option for this.

Strong Cash Value.

Premiums can contractually stop after year 20.

Or Premiums can continue if desired after year 20. (depending on carrier)

The ability to continue is nice, because the child can take over in the future once they are employed.

The advantage of this over a 529 plan, is that this can be used for anything.
If the child does not go to college, the funds can easily be used for something else.

---

Guardian has a 20pay WL that works well for this and is specifically designed for child policies.

It offers an Index Rider on the S&P 500, for the possibility of a higher return vs. just the WL Dividend.

It also offers a Guaranteed Insurability Option. Allowing the adult child to purchase more life insurance, regardless of their health.

---

Mass also offers a 20pay. Penn WL can be designed as a 20pay.

Neither offers the Index Rider. And Guardians GIO Rider is stronger than both.

How do you like the Foresters product here?

 

[scagnt83]

How do you like the Foresters product here?

Not a fan.

Its been a few years since Ive seen an illustration for their participating WL. But historically it has a lot less Cash Value than the top options.

If you want a fraternal with strong CV, look at KoC.

Personally, I use Guardian and Mass.

I've seen old in-force Guardian policies with 5%+ returns.

From a security and consistency and ratings standpoint, Foresters does not compare to the ones I mentioned.

Guardian and Mass have consistently paid Dividends for 100 years longer than Foresters has.