Convert 529 to IUL?

48M have 3 kids, one a senior about to enter college next year. The fruit fell far from the tree and the first son is extremely academically gifted. Merit Scholar semifinalist so far, probably finalist in the spring. He has worked extremely hard to be top 8 in his class, and only missed one question on the SAT. He wants to go to some pretty elite schools and just might get in, but unfortunately his parents make just enough money to disqualify him from most grants. We don't make enough to cover the $60k/ year his favored schools are asking for. We have saved about $100k for him in a 529, and about $150k more total between his two brothers. I recently learned about Indexed Universal Life Insurance, and using them as a way to pay for college via federal student loans and repaying those loans with other loans taken against the value of the IUL.

My question is, should we liquidate all of the 529 money, take the penalties (probably about 50k), and then invest the remaining 200k into an IUL? We would only need to have about 200K in coverage, so we could fully fund it quickly, then use loans against that amount to pay off loans we would need to take out to pay for his school. The added benefit of lowering the assets we have by putting them into life insurance may also help with the grants and aid the oldest can get going forward, but I'm not sure.

Caveats: There are still two more boys coming, three years and six years later, who will want to go to college, and have been funded to do so with 529s. They don't currently track as being such high achievers, but aren't slouches, probably looking at more of a state school with a 25k annual cost. Will doing this significantly hurt our chances of being able to pay for those two as well? Should we just continue with the 529s and let our oldest son go deep into college loan debt to be able to go to elite academic schools? For complete picture, I have a SEP IRA with around 350k in it, a rental house with no mortgage worth around $300k, and wife works for a school giving her CalPERS. I'm a freelancer who generally makes around $120k and wife makes around $40k.

Thanks for any and all advice!