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Life Insurance for your College student

Insurance is a tricky subject, and it's also one that many people don't like to talk about because of the morbidity of it. But the fact is, people die, including students. And in some cases, it can make sense for college students and young adults to have life insurance.

However, no parent ever wants to think about the loss of their child. But you know what's worse? Being burdened by debt along with despair in the event a loss happens. It's for this reason that life insurance could make sense for some students.

The key driver of whether you should purchase life insurance for your student is simple: does your college student have private student loans with a parent being the consigner? If so, the answer is a resounding yes. Otherwise, you may not need any insurance on your student.

Here's why.

Take the story of a student, who went to college to better himself and make his family proud. However, when he was 25 years old when he died from a tragic accident. At the time of his death, he had over $40,000 in private student loans which his parents consigned for him.

The trouble is, unlike Federal student loans, private student loans aren't discharged upon the death of the borrower. Instead, the consigner is responsible for the remaining debt. So, not only were his parents faced with the death of their son, but they were also faced with his debt. They had to call the bank during their time of mourning and express their concerns about being able to pay the bills on the debt. It wasn't until public pressure mounted that the bank agreed to discharge the debt.

For many parents and borrowers, they won't be able to force banks to dismiss the debt. What they see as an option to help pay for their children's education could come back and hurt them financially. They don't realize that they are liable for the debt if they cosign the loan. The fact is, if you cosign a student loan, you owe it too.