The common thinking is that if you’re young you don’t need life insurance due to lack of financial responsibilities. That tends to change when things start pilling on as adulthood approaches. Student loans fall into that category of things that place responsibility on you and getting life insurance to protect it is a good idea.
What you need to know in short is that if you have a cosigner on your loan or have a private loan you want to make sure that you get enough coverage to cover it. The best policy is a term life insurance policy that covers the length of the loan payout time frame. The upside to this is premiums tend to be lower for those in their younger years and term life is the most affordable type of coverage there is, so cost will not be an issue.
Basically here is a highlight of everything about student loans and life insurance:
- If the loan is private or has a cosigner, you should definitely get coverage.
- Get a term life policy for the length of the loan
- Your premiums will most likely be affordable
So if you’re ready to compare quotes look to your right or visit the quotes page. Otherwise let’s dive deeper into detail.
Why Do I Need a Policy for My Loan?
Well the first and best reason is that it’s the responsible thing to do. If you got a loan out you want to make sure your debts are paid before you leave, or in the case of life insurance, right after. But if that’s not enough motivation you probably will have to cover it if it’s a private loan or if you have someone that cosigned for your loan, like a parent. Federal loans are discharged but for private loans you’re legally liable to do so, in which case it’s a possibility that they may go after family to collect. In the case of a cosigner, they can also be left liable to pay off the loan amount. In this case it’d be good to get a small policy to at least cover student loans and funeral expenses.
The Upside
The are a couple upsides that you can enjoy when shopping for life insurance as a student. The first of which is the cost. While this may not be universal, most students are younger in age and this will result in lower premiums. For example, if we run a quote for a 20 year term policy with $100,000 worth of coverage, for a 25 year old, healthy male, non smoker, the monthly premium comes out to $10 a month. Not only do you get lower costs but you get to lock in that lower rate for the next 20 years. That way you have some coverage already in place for any future responsibilities amounting to that sum. You get this break because statistically the chance of you dying is extremely unlikely.
Tips for Buying Coverage
If you need coverage for a student loan there’s a few things you can do right to make sure you get the right policy and not overpay.
Compare – Make sure to work with an independent agency so that you can compare rates with all the companies to get the best rate on the market. Working with a captive agent limits you to one company which can leave you overpaying for coverage. The difference can mean hundreds of dollars in savings. The good news is we’re that independent agency.
Don’t just go for the best quote – If you have any health issues or participate in any activities that may be deemed high risk, than the “the lowest rate on the quote engine isn’t the lowest rate for you.” If you’re a high risk your rates will vary from company to company.
Get what you need – If you’re a student then you’re most likely on a tight budget. This can cause you to be apprehensive about getting life insurance but it’s not good enough reason to forgo doing the responsible thing. Getting a term life policy to cover your debt for the length of the loan will be very affordable. Make sure to get the coverage you can afford comfortably without causing the policy to lapse(go inactive due to payment).
The Next Step
The next step would be to contact us so we can recommend the best route for you in getting coverage. Overall it should be a fairly simple process, but there are a few options to consider. Whether you’re a high risk, want to compare, or simply have questions feel free to get in touch with us so we can guide you in the right direction. Call us at 888-492-1967 or chat us up if it’s not too late!
