I am a parent of four young-adult children that all have college loans with my husband and me as co-signers. The benefits of having life insurance for my children hadn’t crossed my mind. If my child died prematurely, the responsibility of paying off the loans falls on my husband and me. I started researching.
I discovered that Federal loans and private loans work differently. If a person with a Federal student loan died prematurely, the loan is canceled. Some private loans require immediate payment in full by the co-signer.
Sometimes parents open a home equity line of credit or take a loan from a retirement account. If the funds aren’t paid promptly in the event of premature death, the parent’s credit score can be damaged.
A term life policy will provide peace of mind, knowing that you will be able to pay off their college debt. It can also help pay final expenses, such as funeral and burial costs, and it is not expensive. A 20-year term life policy with a $100,000 limit is approximately $100 a year.
Another thing to keep in mind is that if a child has graduated from college and is gainfully employed, a benefits package may include life insurance. Listing the student loan co-signer(s) as the life insurance beneficiary provides reassurance that there will be funds available to pay the loan.
In conclusion, having a life insurance policy on each of my kids is a sound investment that will financially protect my husband and me. I am going to purchase life insurance and get my financial ducks in a row.
Are you a co-signer on a student loan? Do you want a price for life insurance for a student? Go to www.fifs.com/life and click on the “Request Life Quote” button.