Most people don’t want to think about the end of life needs until they are nearing the end of their lives, but the truth is that life insurance is the kind of policy you hope you don’t need for a very long time, but one you are thankful for when the time comes. College students are often thinking more about having fun and finishing their classes than they are thinking about things like life insurance. When you’re in college, you think you have decades ahead of you. But getting life insurance when you’re in college can provide many benefits, here are just a few of them.
Pays off Student Loans
When you take out student loans, someone needs to pay for them. This is especially true if there are any private student loans in the mix or you have a lot of them. Often family members, parents included will cosign for student loans. This means that if the student dies before they are paid off that the cosigner would assume responsibility for them.
If you’re the parent, it might be beneficial to take out a life insurance policy on your college-aged child that would cover at least the cost of the loans. For the college student, it’s a responsible thing to do to ensure you have enough life insurance policy coverage that would easily pay off your remaining student loan debt so that none of your parents, children, or spouse would bear the responsibility for them. Finances for college students may look different than working adults, but it doesn’t mean that they don’t need insurance as well.
Provides a Nest Egg for Children
Life insurance helps parents, even college student parents leave something behind for their children. While no one likes to consider death to be a possibility, accidents and illness happen and there is no way to know what the future holds. Having life insurance can not only pay off your debt, but it can set your children up for success in the future. It can also cover funeral costs, any remaining medical bills, and other expenses that may occur as a result of the death of the college student. This can protect a spouse, assets like a home, and even give your family financial stability in the midst of a crisis.
Gives Family Members Peace of Mind
Having life insurance is something that grown-ups do. They have it to provide their family with peace of mind in the event of a catastrophic event. Knowing that in a time of sadness, there would be little stress over money and financial issues can give people peace in hard situations. Life insurance policies that cover big expenses like student loans, car loans, and other debts that your family may be liable for upon your death.
Whether the college student or the parent takes out the policy doesn’t matter as long as it’s active upon the death of the policy holder. It’s also important to have the right people listed as beneficiaries and to have a will in place to ensure all resources go to the place you desire.
Can Be Used to Start Investing
Some life insurance policies can act as an investment. Before you’re able to get a 401K or other investment in a work environment, a life insurance policy is often the first investment you’ll have as a college student. People who choose permanent life insurance may be able to receive a cash benefit. Some policies set aside a portion of the premium into a separate account that can then be used for a variety of purposes down the line and while the policyholder is still alive. There is also the option to cash out the policy while you’re still alive if you’d prefer to get a different kind of policy or if your work is offering a life insurance benefit after you’re done with college. This cash can help you reach financial goals more quickly if you use the investment strategically.
College students don’t always have a lot of money yet, but they often have debts and other financial obligations. Parents who go back to college will help their children greatly in the event of their death by having a good life insurance policy in place. These policies can give the parents of college students peace of mind as well as give the spouse of the college student some ease.