If your college student has private student loans with you as a cosigner, you need to consider buying a life insurance policy. Otherwise, if your child dies, you will be responsible to pay off the loans for an education that never got to be used.
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.
If you are a cosigner for your college student, it’s important you understand the different types of college loans available:
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:
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 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.
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.
Most carriers now have many options of no exam policies (which fall under the category of Term Life Insurance) and charge the same price as medically-underwritten life insurance policies. 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.
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.