A college student usually doesn’t have children or debt, other than student loans. Without dependents to rely on them, why would you buy life insurance for a child in college? No one wants to contemplate the death of a child. However, should this tragedy occur in your family, if you have signed any loans, it could become a problem. On the plus side, buying life insurance when a person is young and healthy will mean very affordable premiums.
Married college students
If your child is married, planning a marriage or has a child, it is a good idea to buy life insurance. In the event of loss of life, the policy will provide support to the partner, spouse or child to help them get through the coming years, without financial stress.
Most college students take out loans to pay for their education. The type of loan determines what happens if the university student leaves prematurely. Federal student loans allow the debt to be discharged when the person dies, but private student loans must be paid off, and require a co-signer, usually a parent or grandparent, who is now responsible for paying off the loan. The death benefit from a life insurance policy can be used to cover this debt.
Establishment of an asset
Whole life insurance builds equity over time. A college student who has a whole life insurance policy establishes an asset that can be used in the future, such as borrowing from the policy to pay for future needs. Buying a whole life policy for your child can help them create a healthier financial future. Once in the working community, your child can take over paying the premiums and watch the asset grow.
Does your college student need life insurance?
To decide whether to buy life insurance for a college student, consider these questions:
- Does your child have outstanding car loans or other debts?
- Did your child take out student loans that would have to be repaid in the event of their death?
- Does your child have a spouse, partner or child who needs support?
- Have you mortgaged your home or taken out other types of loans to pay for your child̵7;s education?
- Does your child have credit card debt?
- Have you co-signed any loans for your child?
Choosing the right policy
The purpose of life insurance makes a difference in which type you should buy. A very low interest, term policy may best suit your budget. The cost of premiums for young, healthy people is very low and extremely affordable. If you want to help your child build an asset, a whole life policy can be put in place to build an asset for the future. Every child and family is different, and with the help of one of our local agents, you can choose the life insurance policy that fits your budget and needs.