Are you, or a child of yours heading off to college? UW-Milwaukee or Marquette perhaps? If so, life insurance may be the furthest thing from your mind. After all, most college-age kids are more concerned about establishing their independence and pledging to their favorite fraternity or sorority than planning for a premature death. Instead of pushing life insurance to the bottom of the to-do list, there are several reasons why now may be the time to purchase coverage for yourself or your college-bound child.
Why Buy Life Insurance in College if You Have No Dependents?
One of the biggest misconceptions about purchasing life insurance in college is that a person without dependents has no need for coverage. The truth is, an unexpected death can bring about serious financial consequences for surviving loved ones – particularly parents who are left to foot the bill for funeral expenses and other debts.
Student Loan Debts
Nearly 3 in 4 students graduate college with student loan debt, usually amounting to tens of thousands of dollars. While government loans are forgiven if a student dies before repaying the balance, private loan companies will pursue co-signers (usually parents) for the balance on loans for years to come, creating a financial nightmare and mountain of debt. CNN Money recommends purchasing life insurance to help repay private student loan debt in the event of a child’s premature death. Either the child or the parent who has co-signed the loan may take out term life coverage, ideally equivalent to the amount of the debt.
Life Insurance During College is Affordable and Accessible
College students have a lot going for them. Most are young, healthy and at low risk of premature death. While these are the very factors that reduce the urgency of taking out a life insurance policy, they make a compelling reason for purchasing coverage now rather than later. In fact, life insurance is never more affordable for an adult than during the college years. Policy premiums are risk-based, and the lowest rates are awarded to those who are young and in good health.
A 30-year term policy, for example, can be used to protect parents against student loan debt now, and then the beneficiary can be changed when the insured gets married and has children. The rates are locked in, and coverage is guaranteed, providing peace of mind even if future health problems arise. Similarly, a whole-life policy purchased during the college years will boast lower premiums and has several decades of cash value earning potential.
According to the U.S. Department of Education, nearly 1 in 5 undergraduate students are already married, and 1 in 4 are raising children. For these students, life insurance is a necessity, as a premature death will leave a spouse and children in need of income replacement.
Talk to an Agent about Life Insurance for Students
Do not put off purchasing life insurance in college. While no one wants to think about the possibility of an early death, taking the time to prepare for the unexpected could save your survivors a lot of financial turmoil. Now is the time to take advantage of low rates and high approval rates. Contact Smith Insurance and Financial Services today to speak to us about life insurance for college students and find out which policy is right for you.