Life insurance is typically something you think about when you get married or have kids. However, it can be a valuable asset for college students, too. Learn more as you decide if your favorite college student needs life insurance.
Life insurance companies use health as a major factor in determining premium costs. College students are generally healthy and can purchase insurance at the best possible rates. As an example, a $250,000 policy costs an average of $12 per month for a healthy 26-year-old. By buying life insurance now, college students purchase an important investment that’s affordable and provides years of coverage.
Student Loans
Government-sponsored student loans generally cancel when the policy holder dies. Loans issued by banks and other private sources do not typically cancel, though. A student’s estate or co-signer may be responsible to repay the debt. Purchase life insurance to cover any student debt and protect your assets.
Non-Student Loan Debts
Many students and their parents borrow from a home equity line of credit, 401(k) or mortgage or they charge college expenses on a credit card. These debts do not automatically cancel upon the student’s death. Life insurance can cover these debts and reduce the financial burden survivors face during this difficult time.
Consumer Debt
Many college students accumulate consumer debt, which may include credit cars and a car loan. Life insurance can cover these debts that must be repaid.
High-Risk Lifestyle
In general, college students between the ages of 18 and 25 face the highest risk of any age group for accidents. A life insurance policy provides a layer of protection for young people in this age group.
Marriage
One in four college students are either engaged or married. Life insurance provides valuable peace of mind and financial protection for young couples. Consider purchasing policies for both spouses that covers normal living expenses and any outstanding debt.
Final Expenses
Funerals can cost upwards of $10,000. Use the life insurance policy to pay for final expenses and provide the student and his or her loved ones with a fitting farewell.
Grieving
When a college student dies, grief may be especially difficult. A life insurance policy provides financial resources that allow the family to take time off work, attend counseling, host family and friends from out of town or travel as they cope with their loss.
Life insurance can be a valuable asset for college students and their families. Consider purchasing a policy this fall as you send your favorite college student to campus. Your insurance agent will be happy to provide additional details as you secure your student’s finances.
