FAFSA does not include life insurance, such as Indexed Universal Life (IUL), in its asset calculations. While some private colleges may inquire about the cash value of life insurance and count it as an asset, FAFSA itself does not. Therefore, saving for tuition costs in a 529 plan will appear as assets on the FAFSA form, potentially affecting the amount of financial aid awarded. Continuously paying premiums to enhance your child’s IUL policy typically won’t increase college expenses in most cases, preserving your investment in their financial future.