"They're pretty complicated--most people would want help figuring one out," says Strickland.
They're also less enticing if you already have ample life insurance in place.
And keep in mind that if you take out large loans against these policies and the stock market crashes, pulling down the remaining value of your account, you might have to pony up more money just to keep the insurance in force.
This would be an unwelcome development, especially if the insurance component is only a secondary consideration in your college planning effort.
Mutual Funds for the Tuition Tab Here are eight reasons why mutual funds, and especially stock funds, are appropriate for college planning.
* Professional management. Harried parents do not have to worry about buying and selling individual securities themselves.
* Security diversification. With dozens or scores of holdings, most funds will track their respective markets fairly closely over time--a comfort for parents with a long-term investment outlook. There is little danger that an individual holding will bring an entire fund down with it.
* Asset diversification. Mutual funds are the most efficient way to get low-cost access to various types of asset categories, from large foreign stocks to small U.S. companies. College-oriented investors may want to spread their money among different types of stock funds.
* Switch privileges. Most fund families allow easy, no-cost exchanges between funds. As children approach college age, parents might want to switch from riskier stock funds to safer bond or money-market alternatives.
* Low minimums. Most funds can be purchased with initial investments of $250 to $2,500, allowing nearly all cash-strapped parents to get started.
* Dollar-cost averaging. Many funds will let you set up systematic investment programs that allow monthly contributions of as little as $25 or $50. With or without this feature, nearly all funds allow subsequent investments at any time.
* Liquidity. Nearly all funds will let investors pull out money at any time. Many fixed-income portfolios feature check-writing privileges for ease of access--a handy feature when it comes time to pay college bills. Some fund companies have systematic withdrawal plans for removing money at regular intervals.
* Ease of reinvestment. Mutual funds allow any amount of capital gains and dividends to be reinvested in additional shares automatically--a feature that can boost returns over time. This convenience typically is not available with individual stocks and bonds.
