Why Do Parents Think This ?

[Josh]

Please clarify; I apologize I do not follow your version of English.

I think he means sexual favors.
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"Why do all new parents think they can purchase a life insurance policy that will cost them $20 or less and somehow have enough cash value to pay for college when the kid are ready?? "

Cause they really don't want to accept the reality of the situation. For those of you who are touting the "you should be putting $300-400 a month into a XYZ" Let me ask... after you've kicked them in the gut, how many spend that much with you?

Everybody suspends reality about something sometime in their lives. It is human nature. We talk down something because we can't compete, so we bash and call the clients who go that direction "stupid or dumb", when really we could not present a strong enough argument for them not to.

Out of curiosity, how long have you been in the business?

We say they are dumb because they don't understand the way money works. Personally I would tell them to let the infant take out student loans if and when the Ichild decides to go to school. 100:1 the parents have debt they need to pay off and would be better off paying that down and then start putting money in a good old fashioned savings account. Either that or a 15 year ROP with a child rider rather than the tiny wl policy. There are plenty of other options too, but those seem to make more sense to me.

 

[scagnt83]

Realistically there are only two ways to pay for college:
Parents can invest money in some type of investment product.
Or you get a loan.

A prospct who wants to save $20/month is not a college savings prospect, but they could be a LI prospect. Even with an unrealistic 20% return $20/month would never fund college. You dont talk down to the prospect about this, you simply show them the numbers and explain it.

Then you ask about LI, chances are its not nearly enough so you explain how that is a bigger priority than college savings. How can they save for their kids college if they arent here anymore?....


$20/month wouldnt even begin to fund an efficient PI policy. So LI is def out of the question. And a 529 wouldnt be worth the effort for such a small amount.

Parents try to do stuff like this b/c they hear that they should be doing it. Once you explain that at their income level its OK to not pay for college, and actually more efficient, it becomes a non issue and they often become a client.