Who Should Buy Life Insurance for Their College Student?

Parents should consider life insurance for a college student mainly when they’ve cosigned private student loans — especially loans taken out before November 20, 2018, which may not release cosigners if the student dies — or when the student is married or has dependents. Federal loans, including Parent PLUS, are discharged at death and generally don’t require coverage.

If your college student has private student loans with you as a cosigner, you need to consider buying a life insurance policy. For private loans taken out after November 20, 2018, federal law now requires the lender to release cosigners if the student borrower dies (Congress.gov, 2018)^². But for older loans, or when the lender charges the unpaid balance against the student’s estate, the family can still end up paying for an education that never got to be used (SavingForCollege)^³.

If your college student is married or has dependents, then it’s even more important to take out a life insurance policy. A life insurance policy will provide peace of mind for the entire family by mitigating any added financial stress in an unthinkable difficult situation.

On the other hand, if you are not a cosigner on any student loans, or if your college student does not have any significant debt, it is not necessary to buy life insurance right away.

Understanding The Types of College Loans

If you are a cosigner for your college student, it’s important you understand the different types of college loans available:

• Private Student Loans: These are issued by banks, credit unions and other private lenders. Since late 2018, federal law bars private lenders from declaring a default just because a cosigner dies, and requires them to release cosigners if the student borrower dies — but only for loans taken out after November 20, 2018 (Congress.gov, 2018)^². Roughly half of private loan programs offer no death discharge at all, meaning the lender can still pursue the student’s estate for the balance (SavingForCollege)^³. Before you obtain a private loan for your college student, read all the fine print, and find out exactly who is responsible for repaying the debt in case of death; for pre-2018 loans or estate-liable loans, you should strongly consider getting a life insurance policy.
  
  
• Federal Student Loans: These are issued by the U.S. Department of Education (Federal Student Aid)^⁴. These loans rarely require cosigners and are discharged if the borrower dies. That includes Parent PLUS loans: under federal regulations, a Parent PLUS loan is discharged if either the parent borrower dies or the student on whose behalf the loan was taken out dies (34 CFR 685.212)^¹ — so parents are not left “on the hook.” Life insurance for a college student is really about private loans, not federal ones.
  

What Type of Life Insurance Should You Buy for Your College Student?

Once you decide on buying a life insurance policy for your college student, you will need to determine what type of policy will work best. Here are some of the steps that will help you decide:

1. Determine your coverage needs
   
   Final expenses?

   This may include burial costs, medical bills or associated legal fees

   How much debt do you have?

   This may include mortgages, car loans, student loans, credit card or any outstanding debts

   Monthly income needs?

   What you earn a month is a good amount to enter here

   How many years?

   How long your loved ones will need your income till they become financially stable?

   How many children?

   How many children do you have under the age of 18?

   College funding required?

   How much do you suppose is required for college? Specify amount for one child.

   Your current assets?

   This would include your current savings and investments, retirement funds and existing life insurance policies

   Life Insurance Coverage Needed:

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2. Compare prices and get quotes
3. Choose an insurance company and submit an application
4. Provide proof of insurable interest (your cosigned loan counts)
5. Wait for underwriting approval
6. Sign your policy

When buying life insurance for your college student, know that you are already paying for other expenses of a household, so you want to make sure you find a policy that fits in your budget.

The two most common types of life insurance policies available are:

Term Life Insurance

Term life insurance generally makes sense for most people because it is much more affordable than other policies.

You also get an option to buy the policy for a set amount of time. So once the college is over, and your loan is taken care of, you can cancel the policy if you like. 

It’s inexpensive at this age: a healthy 20-year-old can get a $500,000, 20-year term policy for roughly $22 a month (women) to $29 a month (men) from the most competitive carriers (MoneyGeek, 2026)^⁵.

Whole Life Insurance

Whole life insurance is a type of permanent life insurance in which the policyholders get guaranteed coverage for their entire life. 

These policies include a cash value component, which accumulates value over time and can be used for many things, without impacting the death benefit amount. This may sound interesting, but everything comes at a price. Whole policies are expensive and complicated when compared to term life.

Therefore, we recommend buying term life insurance since it is much more affordable. It is the kind of policy you’ll want to buy to cover a debt like a student loan. Therefore, start with looking at companies that offer term life insurance.

Consider a No-Exam Policy

Most carriers now have many options of no exam policies (which fall under the category of Term Life Insurance) , often at rates comparable to medically underwritten policies — though healthy applicants may still find the best overall value with full underwriting (AccuQuote, 2026)^⁶. The key is fitting the stringent profile of younger (usually under 50 or 60), healthy, low-risk applicants with no chronic medical conditions, prescription meds, or other risky lifestyle choices.  For instance, a young type-1 diabetic (the childhood type of this disease) would not qualify for it. So, if your college student is a healthy individual with no underlying conditions, no exam policy is your best option.

These no exam policies are especially beneficial for students that attend school out of state – Scheduling and coordinating an exam for a busy college student in another state is no easy task. Especially considering that the examiner is almost always mobile and completes the exam in the applicant’s home. That doesn’t sound like much fun for a college student living in a dorm.

Additionally, with no exam, you can receive your results and eligibility for life insurance policies within days and sometimes immediately by phone instead of waiting weeks for processing.

How to Score Good Rates on Your College Student Life Insurance Policy?

Rates are typically much lower for younger people. But there are some key factors that could affect the amount of premium for your life insurance policy.

• One major factor at any age is whether or not the insured is a smoker. If your college student smokes, you can expect to pay significantly more for the same insurance plan than someone who does not smoke.

• Engaging in high-risk sports or hobbies such as sky diving, scuba diving, rock climbing can also end up costing you more for your life insurance policy.
• Maintaining a healthy weight, practicing good health habits and seeking regular medical care are some of the ways that can help lower your insurance costs.

• Looking for Low-Cost Life Insurance for College Students? LifeQuote Can Help

If you are looking for life insurance for college students, we’ve got you covered.

Speak to one of our agents at LifeQuote today to get started on a life insurance plan that is best suited to your college student needs or try out our free quote generator to receive a personalized quote instantly. The idea of getting life insurance for your college student may seem daunting, but it doesn’t have to be.

Frequently Asked Questions

Do student loans go away when you die?

Federal student loans — including Parent PLUS loans — are discharged when the borrower dies (or, for Parent PLUS, when the student dies) (34 CFR 685.212)^¹. Private loans are different: about half of private loan programs offer no death discharge, and the lender may pursue the student’s estate for the balance (SavingForCollege)^³.

Is a cosigner responsible for student loans if the student dies?

Not for private loans taken out after November 20, 2018 — federal law requires lenders to release cosigners when the student borrower dies. For loans originated before that date, the cosigner’s liability depends on the loan contract, which is exactly the gap a small term life policy can cover (Congress.gov, 2018)^² (SavingForCollege)^³.

How much does life insurance cost for a college student?

Very little — college students are the cheapest people to insure. A healthy 20-year-old pays about $22–$29 per month for a $500,000, 20-year term policy, and smaller policies sized to a loan balance cost even less (MoneyGeek, 2026)^⁵. Most young adults guess the price at 10–12 times its actual cost (LIMRA, 2025)^⁷.

Can a parent take out life insurance on a college student?

Yes. A parent can own and pay for a policy on their child with the child’s consent, as long as there’s insurable interest — and a cosigned student loan is a textbook example. The parent is typically both the policy owner and the beneficiary, so the payout goes directly to retiring the debt.

How much coverage does a college student actually need?

Add up what would actually fall on the family: cosigned private loan balances, any car loan or credit card debt, and final expenses. For most students that totals well under $100,000 — there’s no need to buy more coverage than the financial exposure you’re protecting against.

References

1. 34 CFR § 685.212 — Discharge of a loan obligation (death). U.S. Code of Federal Regulations, via Cornell Law School LII. https://www.law.cornell.edu/cfr/text/34/685.212

2. U.S. Congress. S.2155, Economic Growth, Regulatory Relief, and Consumer Protection Act (2018), Sec. 601 — cosigner release upon death of the student borrower. https://www.congress.gov/bill/115th-congress/senate-bill/2155

3. SavingForCollege.com. “What Happens to Student and Parent Loans if the Borrower Dies?” https://www.savingforcollege.com/article/what-happens-to-student-and-parent-loans-if-the-borrower-dies

4. Federal Student Aid, U.S. Department of Education. “Federal Versus Private Loans.” https://studentaid.gov/understand-aid/types/loans/federal-vs-private

5. MoneyGeek. “Best Life Insurance for College Students (2026).” June 2026. https://www.moneygeek.com/insurance/life/best/life-insurance-for-students/

6. AccuQuote. “Best Term Life Insurance for Young Adults.” 2026. https://accuquote.com/best-term-life-insurance-for-young-adults/

7. LIMRA & Life Happens. “Adults Age 30 and Younger Overestimate Life Insurance Cost by 10–12 Times.” 2025 Insurance Barometer Study, June 2025. https://www.limra.com/en/newsroom/news-releases/2025/adults-age-30-and-younger-overestimate-life-insurance-cost-by-1012-times/