As a college student, life insurance is probably the last thing on your mind. You’re focused on doing well in classes and preparing for your future career. However, taking out life insurance as a college student can give you and your family some peace of mind in case an accident or unexpected health problem were to come up. As morbid and unpleasant as it can be to think about, it’s always better to be safe than sorry when it comes to preparing for the future.
Why College Students Need Life Insurance
There are a few reasons why college students in particular need life insurance. The first is the same reason everyone needs life insurance – you never know what is going to happen. A good life insurance policy will cover funeral expenses and any other one-time expenses your family may incur because of your death. Many people mistakenly think that young people don’t need life insurance if they don’t have any dependents, but this isn’t necessarily true.
Life insurance is important for college students because it can cover any outstanding debts that the student has after their death. College is very expensive, and most students and their families have taken out loans to cover their education. If you take out federal student loans, the remaining amount owed will be canceled in the event of your death. However, if you take out private student loans, these must still be paid off regardless of the situation. If you are a parent who co-signed a loan for your student, this can be stressful enough on its own. On top of the remaining expenses to consider, many private loans will accelerate the repayment schedule in the event of the student’s death, or even require the full amount of the loan up front. Additionally, many parents use other borrowing methods to pay for their child’s education, which will also still need to be repaid. A good life insurance policy will cover the amount of money that your child owes in the event of their unlikely death.
If you are a college student who does have dependents, then it’s even more important to take out a life insurance policy, even if you are healthy. Many people do choose to get married or have children while they are still in college, and that can make the financial situation for the family even more complicated if something were to happen. Your life insurance policy will provide peace of mind for your entire family – your parents, spouse, and any children.
Buying Life Insurance As A College Student
There are a few things to consider when buying life insurance as a college student. College is already expensive, so you want to make sure you can find a life insurance policy that will fit in your budget. Generally, it’s always best to go with a term life insurance policy. Term life insurance policies are for a set amount of time, and you can choose to renew or cancel when that time period is up. They are much more affordable than whole life insurance policies and are easy to fit into a college student’s budget. The other benefit of a term life insurance plan is that you don’t have to renew it – once college is over and your loans are taken care of, you can cancel it or change the terms if you don’t feel like you need it anymore.
Although you do want an insurance plan that fits into your budget, it’s important to make sure you have enough coverage. Add up the amount of your student loans and any other financial responsibilities your family would owe in the event of your death. You will need to take out at least this much money for your life insurance policy. It will help to take out more than your loan amounts, just so that your family has enough money for funeral expenses.
Read the fine print of your life insurance policy to make sure it will actually cover the loan repayment you are going to need. Every insurance policy is different, and you need to make sure yours is viable for your situation. You should make sure you are working with an insurance company that you trust, and meet with an insurance professional before anything is finalized.
The idea of getting life insurance as a college student may seem daunting, but it doesn’t have to be. Talk with your family about life insurance to see what makes the most sense for all of you. If you already have auto or home insurance, it may be easy to add a term life insurance policy to your existing account. You also might want to shop around for life insurance plans – you never know where you might be able to find a good deal.