"Rolling Over" or Converting a 529 Plan into a whole life insurance policy I work at a college planning company and many families that we service have 529 plans and state prepaid college funds.
1. Can a 529 plan be "rolled over" or converted into a whole life insurance policy (I'm specifically thinking of using a Covenant II Infinite Banking Concept[IBC] policy from Mutual Trust Life[MTL] )?
2. What are the tax liabilities of liquidating a 529 Plan for the purpose of putting the money into a whole life insurance policy?
3. Is there a 10% penalty for the lumpsum withdrawal?
4. Are the 529 funds taxed at the time of withdrawl? |