A debate should be demanded about the validity of using life insurance for college funding, in some cases. Does this practice cause some needy, college students to receive less financial aid? Are insurance agents who recommend this strategy at fault?

Some individuals purchase large, life insurance policies, and contribute larger than normal, premium amounts in the policy. This may sound like a normal practice, right? The question is whether this a legitimate practice, when the person is attempting to look poorer, to qualify their child for more financial aid. Since the money is in a life insurance policy, that money does not have to be reported, when filling out financial aid forms. Most people, who have average savings would not attempt this tactic for college funding.

The agent that suggests this college funding plan, may be seen as unscrupulous. To others, the insurance agent may be seen as a quality advisor, just doing their job. Saving money to help you do other things is what an advisor does! However it is a sticky situation that many agents would chose to avoid.

The college strategy that uses life insurance funding has some moral dilemmas. The agent who participates, may be talking to his or her compliance department real soon. Could you feel bad, that some student does not get as much financial aid, even though you can afford the payments? This practice may not be illegal, but it is definitely questionable. If doing something does not make you feel warm and fuzzy, you probably should not do it.

Disclaimer: Always consult a financial profession to determine what coverage is right for you.

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