According to the College Board's most recent report: Trends in College Pricing 2010, over the decade from 2000-01 to 2010-11, published tuition and fees at public four-year colleges and universities increased at an average rate of 5.6% per year beyond the rate of general inflation. From 2000 through 2009, the S&P 500 index returned -24.10%. The dramatic rise in college tuition costs and staggering loss of personal wealth have forced parents to explore alternatives to existing college savings strategies.

For the past decade, financial planners have recommended tax-advantaged 529 plans as the primary vehicle for college savings. A 529 plan is a tax-advantaged financial product intended to pay "qualified educational expenses" (e.g., college tuition). Plans are generally state-sponsored, but administered by investment companies. Families can choose from an array of professionally managed funds both in and out of their resident state. Some states allow tax-deductible contributions for state residents.

In response to high fees and 529 plan underperformance, financial strategists are considering whole and universal life insurance as a college savings alternative. The tax-deferred cash value accumulation of whole and universal life insurance includes some of the same tax advantages of the 529 plan, with performance guarantees and reduced volatility.

Unlike a 529 plan, the cash value of juvenile life insurance can be used at any time, for any purpose, without penalty and is not limited to qualified educational expenses. If the child is lucky enough to obtain a scholarship or decides to postpone college, the funds continue to grow and lifetime fully-paid insurance is available when the need arises. After the insured reaches the age of 21, some insurance companies offer the opportunity to purchase up to $2,000,000 of additional coverage without a medical exam.

The cash value of juvenile life Insurance is sheltered from the federal financial aid needs analysis process, an important consideration for upper-middle class families on the "bubble" for financial aid.

Juvenile life insurance provides growth guarantees, unavailable with a 529 plan. The 38.5% decline in the S&P 500® index in 2008 dealt a devastating blow to a lifetime of carefully managed savings - just when the money was needed most. A whole juvenile life policy that increases by a minimum guaranteed interest rate, plus a non-guaranteed dividend declared annually by the insurance company, can provide funds needed at a time certain, with less risk. Indexed juvenile life is permanent universal life insurance that has cash value increases linked to the performance of an equity index (e.g., S&P 500®) up to a certain percentage (a "cap") with downside protection (a "floor").

Some indexed juvenile life products have a guaranteed minimum interest rate of 2%. For parents willing to forego a higher initial guaranteed interest rate, an indexed policy is structured to increase in value when the stock market goes up and will not incur losses if the market goes down.