<prompt> Human: I feel like Im missing something because - at least on paper - it seams like building cash value in a whole life insurance policy provides all of the same benefits as a 529 plan for college savings with increased flexibility i.e. if junior gets a full-ride scholarship or opts to start a business instead of attend college, I can tap the funds in the life insurance where the 529 plan would be more restrictive.The reason I wonder what Im missing is that at financial seminars and in the basic consumer financial reading I do Money, Forbes etc, whole life is generally panned as an investment tool. I get that its not an aggressive investment, but its quite secure and the tax benefits of the capital gain is solid.If Im going to be buying life insurance anyway, what are the downsides to going the whole life route and using it as an investment tool?EDIT: To clarify, Im not insuring junior, Im buying the policy on me and my wife with the cash value being earmarked for junior.Assistant: Borrowing against the value is tax free, but you still pay interest and fees to service the loan. On the other hand, a 529 plan is completely tax free and can be used at any educational institution that is approved to receive federal financial aid.The flexibility of a 529 is equal to WLI in paying for school but the 529 has fewer fees, provides more generous returns and is privileged when assets are being counted for FAFSA. Seriously, if everyone is telling you that WLI is a bad deal compared to a 529, dont you think that theres at least some truth in the statement?Human: Seriously, if everyone is telling you that WLI is a bad deal compared to a 529, dont you think that theres at least some truth in the statement?Of course. But at the same time, there are some very smart people in my life that I respect a great deal who have gone the WLI route. If it was really this bad a deal, I have a hard time understanding why they did that. I think theres got to be something to it.So far, the answers Ive seen here go something like this:1 529 is actually a good deal. Yes, I agree, as long as the money is used for education in 18 years. If its not, the 529 is not a very good deal at all.2 Youd be better off borrowing against a 401k or IRA. Maybe, but Id prefer to keep those completely off limits for something like this; I personally believe retirement money should be invisible until you retire.3 Mutual funds are they way to go. Maybe. I have to look into this. The obvious downside is that there are no tax benefits for the capital gains that you can get in a 529 andor WLI.4 You dont need insurance. Seems like a personal choice. For many the life insurance payout is part of the estate that they pass onto their kidsgrandkids.5 WLI is overpriced. If it were solely insurance, I totally agree. Its not though. The cash value element acts more like an investment, so its not fair to compare it with other insurance.For the confidence that people discount WLI, Im not seeing any truly compelling reasons. That being said, I do need to crunch some numbers, which I havent done. Thats probably the key.  <response>: I dont think you fully appreciate how either a 529 plan or WLI actually works based on how you separate out mutual funds in your analysis.A 529 plan is just an account for holding investments such as mutual funds. The particular investments available depend on which plan you choose.I posit that those people who have invested in WLI have an adviser who profits from the commissions on their plans. It sounds like youve made up your mind to buy into WLI. Id encourage you to carefully investigate the actual returns year to year and ask your insurance salesperson how they are paid. 