(MONEY Magazine) – Q In 1987, my wife and I dropped our New Jersey Blue Cross/Blue Shield health plan to buy one recommended by the National Association for the Self-Employed. The plan, which costs us $1,701 a quarter with a $2,400 deductible, promises to return at age 65 (about 15 years from now) all the premiums we have paid up until then minus any claims. Is this a good deal? We wonder, for example, whether the company might be in danger of going under before we get our money back. Fong Wu Delran, N.J. A The problem with this policy is not the fiscal health of its backer. Your insurer, Pacific Fidelity Life, has an AA+ rating -- that is, very good -- from Standard & Poor's. The problem is the policy covers only treatments in the hospital. Since more than half of all insured medical costs are for out- of-hospital care, you are seriously underprotected. Moreover, that $2,400 deductible is immense. M. Jay Einstein, a chartered life underwriter in Vineland, N.J., points out that a comprehensive major-medical policy from a company like John Alden Life Insurance (800-366-6762) with a $750-a-person deductible, 80% reimbursement for subsequent bills up to $10,000 and full coverage thereafter up to a $2 million lifetime cap would cost only $1,021 a quarter -- over $1,000 a year less than your plan. And who knows whether you'll ever get much back. During the next 15 years, you'll pay $116,463 in premiums, so your medical claims must average under $7,764 annually for you to recoup anything. These days, of course, you can run up nearly that sum on an appendectomy (now about $6,500) plus an ingrown toenail. The 314,000-member National Association for the Self-Employed, a nonprofit corporation established 10 years ago to help small-business owners, markets the policy through an affiliate that signs up ''enrollers.'' These salespeople get $20 for every $48 NASE annual membership they sell, plus 21% of the first year's premium on health insurance -- a commission that's roughly twice the typical 10% to 12%. With help like this, some of the self-employed could soon be out of business.

Q My parents own a home in Pennsylvania, built years ago for $25,000 but now worth $125,000. Though they want to stay in the house, they would like to take advantage of the one-time $125,000 capital-gains tax exclusion that is available to people over 55 who are selling their principal residence. Should they sell the house to their three children and then rent it back from us? We kids would avoid inheritance tax and get a stepped-up tax basis on the property. Douglas M. Bilheimer Eugene, Ore. A Sure, but you and your siblings won't be liable for any federal estate taxes when you inherit the property anyway, unless the total estate is worth more than $600,000. Moreover, the cost basis will be reset to its value on the date of inheritance -- meaning you won't pay any capital-gains tax if you sell it promptly. I say, avoid the hassle; let the folks keep the castle.

Q My son, a high school junior who lives with me, is first in his class, has combined SAT scores of 1,350 and wants to go to an Ivy League school. Unfortunately, I earn only $20,000 annually -- about what a year at those institutions costs. His father (my ex-husband) earns more than $200,000 but appears unwilling to contribute to my son's college expenses. Will his dad's high income disqualify my son from receiving financial aid? Name withheld by request Port Charlotte, Fla. A Not if your son hopes to qualify for a bit of the $21 billion in federal loans and grants that make up 75% of all college aid given yearly. Under federal rules, it's the wage earner with whom the child mainly lives -- in this case, you -- whose salary determines eligibility. Just enter your salary (and not your husband's, even if you know it) on the federal financial aid form. Then, in the space for explaining special circumstances, point out your husband's unwillingness to pay. The situation is a little more complicated at private colleges that have their own funds to distribute. Many such institutions will want your ex-husband to provide financial data and may disqualify your son based on his father's earnings. Kathleen Brouder, information director of the College Board's Scholarship Service, suggests you write to the financial aid director of each college to which your son applies, explaining the situation. ''If you make your case convincingly,'' says Brouder, ''you might find one that's sympathetic.''

Q My stepfather, who passed away a year ago, left my mother financially secure. But friends have told her that he had a ''secret'' bank account -- probably in Las Vegas, where they lived. About $25,000 was missing from their joint account when he died and, no, he wasn't a gambler. Please help us solve this mystery. Janet Belden San Clemente, Calif. A There are plenty of private detectives (albeit probably not as glamorous as Robert Urich, who starred in the now defunct series Vega$) who could conduct an ''asset search'' -- which is what you need. Alan M. Kaplan, director of Attorneys' Investigative Consultants, a Las Vegas agency (702-453-4500), would start by going through your stepdad's papers, particularly phone bills, for leads. ''People like to call their money -- their broker, accountant or lawyer,'' he says. ''Relatives usually expect to find a bank account. More often, the money was turned into real estate, stock or jewelry -- especially if there's another woman involved.'' Well, never mind that. Stephen B. Laub, president of Truth Verification Laboratories (914-683-0143), which has 109 affiliated offices in cities around the country including Vegas, says his operatives would get in touch with all banks within, say, six to nine miles of your home. Both firms would charge $500 to $1,500.

Q In December 1990, after hearing that interest rates were likely to fall, I invested in short- and intermediate-term bond funds and have done very well. Now I am wondering what to do when rates start going up again. Should I cash out now, before my funds' value starts to decline? Steve Sand Lakewood, Colo. A You don't have to make a snap decision, because interest rates usually twiddle this way and that before a clear trend is evident. Furthermore, some economists think rates are still headed toward Brazil. If you expect to need the money soon, move it to a money-market fund now to safeguard your profits. But if you are investing for income or maximum return, then Ralph Norton, editor of the Bond Fund Advisor ($95 a year; Box 2947, Woburn, Mass. 01888; 617-721-4511), advises you to hold tight until the 30-year Treasury bond, recently 7.75%, moves to around 8% or 8.25%, signaling that higher rates might be returning. Alternatively, just keep following your instincts: they've served you well so far.