I am considering using the technique of putting a substantial amount of non-retirement money into a life insurance plan or annuity to shelter some money from FAFSA. I am going through a service and this is something they recommend. Any experiences from people if this really works or not?
One thing I am concerned about are the fees and taxes later on. For example,
1) if do not keep 20% of money in the policy for 10 years then I have a penalty if withdraw from plan.
2) will have 10% penalty for any money taken from plan to pay for student loans (after child graduates) and before I am 59 1/2.
3) Will have capital gain taxes on money withdraw from plan to pay for student loans.
4) Will be paying interest on student loans while they go to school