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I am entertaining the idea of using a whole life policy as a vehicle for investing for my kids college as per JimOhio's suggestion (my agent is still looking into polices).

I like the fact there is some flexibility that a traditional 529 or Coverdell won't offer.

We kind of joke - we have a college fund set up for the 9 year old and a "bail fund" set up for the 4 year old (he's kinda ornery and bad).

But, you can only figure on about a 4% return on the investment part of the cash part of the policy, which isn't the best, I'll admit (which is why I'm still mulling it over - go for return or flexibility).

So. . .that being said, it pays to aggressively invest elsewhere where the return would be high to balance the risk and reward if you are going to go with life insurance.

Let's say at the end of the college investing career, we have $40,000 in 529 money and $50,000 in life insurance - the life insurance becomes flexible money to spend IMO.

I think for retirement, since it is such a long haul that it only deserves a small place in the portfolio.