Student loan debt has become an important issue for almost all Americans.
The amount of debt does not seem to decrease.
But did you know:
That life insurance is the easiest way for a co-signer to protect himself if the student dies.
This post will discuss if students need life insurance, the reasons why you should consider student life insurance and how to get coverage quickly.
Do students need life insurance?
Yes, students need life insurance. While they may not find insurance as an important topic on their list of things to do, it is very important for them to have.
Student loan debt, protection of their relatives and protection of parents from a significant financial burden are good reasons why students should be covered.
Below we examine these reasons in more detail.
3 Reasons to Think About Student Life Insurance
The average student loan debt per borrower is over $ 30,000. Because of this, it is very important to get some form of student loan insurance .
Unlike federal student loans, private student loans will not be canceled if the student dies before repaying the loan.
Private student loans almost always require some type of co-signatory, who will be held responsible for paying off the loan if the student dies at school.
There is even a possibility that the lender will request immediate payment – in full if the student dies.
Obtaining a life insurance policy that more than covers the university period (ten years) and sufficient coverage to cover the loan amount protects all co-signatories on a student loan.
It protects parents
There are several ways a parent can finance their child's education, such as a personal loan, a home loan or a 401,000.
If the student dies before they can pay off their debt, their parents will still be responsible and may lose their home or ruin their credit.
No one likes to pay for something they will never use (except for gym memberships), so there is really no reason to go without life insurance for your student.
Protecting Your Relatives
One thing most people do not consider is that some students have children and need to protect their well-being.
It does not matter if you are single or married; If you are a student and have some relatives, you need life insurance.
Life insurance would protect your spouse and relatives by paying off the student loan debt, covering any final expenses and providing the family with financial stability.
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How to buy life insurance for students
Decide who will own the policy
The first we need to find out is who should be the insurance owner, the parent or the student?
The policy owner plays a crucial role as they are the only ones who can make changes to the policy. They can do things like change premium due dates, delete or add beneficiaries and cancel the policy.
Who will own the policy will depend on:
A student should have their own policy if they have relatives or a spouse.
But if they are single and can still pursue their parents' policy, it may be the best option.
If your parent has co-signed a student loan debt, they may want to be an insurance owner because only the owner can make changes to the policy.
Calculate how much coverage the student needs
- As a parent if you will be an insurance owner, it is important that you get enough coverage to cover the total student loan and choose a reasonable term (at least ten years.) This will ensure that your child is actually protected for how long they could be in school.
- As a student it is best to consider current or future situations if you will be the owner of your own policy. If you are married or have relatives, make sure you get enough life insurance to cover your student loan debt and protect your family for at least 10 to 20 years. This is usually calculated by multiplying your annual income by 10, 15 or 20. The industry standard is 10 times your income, but I always recommend up to 20 times your annual salary if you can afford it.
Get some anonymous quotes & Comparison Shop
Once you understand who will own the policy, how much coverage you need and how long it's time to start comparing shopping.
It is easy to get a life insurance quote online; however, make sure you provide the least information while you are in the quote phase. You just need an idea of what your pricing might be, and you do not need to call 1000 agents just because you want to look at pricing.
Make sure you compare apples to apples; policy maturities and coverage amounts should be the same. Once it matches, it's time to look at the benefits and features of the policy by checking out some reviews.
Read reviews to find the best life insurance company
Once you have some prices from the best competitors, it's time to read reviews about the company.
These should be customer reviews and product reviews like this that describe a specific company and its product.
By doing this step, you will learn more about the product and allow yourself to have a better idea of additional features that can be offered with your product.
For example, some companies include an accelerated death benefit in their policy, while others may charge extra for it.
Once you've completed the process and found at least two top companies, it's time to apply for coverage.
Remember that you or your student still need to be approved. You can usually get an immediate decision or immediate life insurance approval online.
Once you have submitted the application and the policy has been approved, your last step will be to set up automatic payments.
Are you going to use life insurance to pay for college?
Suppose you have received life insurance income as a surviving spouse or through an inheritance. In that case, it may be a good idea to pay for a college or your own college.
The best thing about life insurance is that 98% of the time it will be tax free, and probate is avoided.
When you receive the money, there is no limit to how the funds can be used. If you try to avoid taking on additional debts, the funds from life insurance can work.
According to several personnel finance experts, however, it is important that you have a plan before you start investing your life insurance.
If you are a parent and have decided to help your college student take out a student loan, there is no point in having a life insurance policy.
However, a student with relatives or a spouse may think it is best to have their own policy.
However, there is no reason to wait to be covered; You can click here or on any of the above buttons to get started.
Frequently Asked Questions
Does a college student need life insurance?
Yes, life insurance is important for students because it allows parents to cover outstanding debts if they die. Most families have to take out loans to cover their student education. It is best to be financially protected when deciding to be a co-signer on some type of debt.
How much does a student insurance policy cost?
The average age of a university student is 26 years. Given that the average college student can get a 10-year life insurance policy of $ 250,000 for less than $ 12.00 per month.
How do I get insurance when I'm in college?
The best way to get life insurance when I'm in college is to be added to your parent's plan (if you are 18 or younger) or just buy your own insurance online if you are over 18. Several companies offer life insurance for immediate release.