<p>Hi!
I am a junior nervous about financial aid next year!</p>
<p>My family has no actual income from a job or anything but we get social security disability every month.
so it looked like we were pretty set for financial aid because we made no money.
but my dad who just recently died, had a rather large life insurance plan. threfore it is going to look like we have a couple hundred thousand dollars in savings, but my mother has to use it to live on, so she cant spend it on college...</p>
<p>A) does the huge amount of life insurance that will be cashed soon affect my financial aid amount?
B) is there some way to appeal/ explain situation to colleges next year when applying for aid?</p>
<p>If the money goes into the bank as a checking/savings account, it will look like any other money that your mom has. She will need to write a letter to the financial aid offices of the schools that you apply to explaining her specific special circumstances. Better yet, she should make an appointment and visit them in person.</p>
<p>It may be worth it for your mother to consider converting some of the money into an annuity that will pay her income each year, but will tie up the bulk of the funds as a retirement-type account that is invisible to the financial aid process. Taxguy wrote about something like this (I think) not that long ago. You should look for whatever he has posted here in the Financial Aid forum, or try to PM him for more suggestions.</p>
<p>Wishing you and your mom all the best at this difficult time, and with this difficult problem.</p>
<p>According to someone I know going through this, she has been told that it depends on who the beneficiary is on the policy; if the student somehow is the beneficiary, it would be very difficult to change the financial aid result; the money is considered the student's to be used for college expenses....if the beneficiary on the policy is solely the parent, yes, the annuity idea is the best way.....</p>
<p>If Taxguy comes on.....would that annuity idea work for the student as well?? (under the scenario where the student was beneficiary on the policy?)</p>
<p>I am not sure if there is any reason to play games (read problematic annuity conversion) with this asset or even write a letter of appeal (unfounded in my opinion.)</p>
<p>The very basic tenet of financial aid is that it is FOREMOST a parental responsibility as well as the student's. The assessment of the proceeds of the life insurance will be rather low and subject to a large exclusion. </p>
<p>It seems that the assessment at the parent level will represent a very reasonable family contribution, in all senses of the word, and one your family could live with. </p>
<p>For what it is worth, if you really believe your mother will need 100% of the funds, YOU as a student should have few problems replenishing your mother's account after graduation.</p>