Life insurance. It’s not something you might immediately think of as necessary for a college student who is vibrant, healthy, and young. However, with the state of the economy today, more and more parents today are considering taking out life insurance policies on their college students. If you have a college student and are considering purchasing a life insurance policy for them, check out the information below. It contains several reasons why parents might want their student to have life insurance coverage – or why college students might want to purchase coverage themselves – and the benefits and drawbacks of doing so.
Life insurance is one of the best investments that you could ever make for your loved ones, even as a college student. The good news is, if you’re a young college student, life insurance is going to be very affordable.
The Need for Life Insurance
With the state of the economy today, and the amount of student debt people are being left with after paying for college, more and more parents are taking out life insurance policies for their children. The reason behind this decision for coverage is so that parents won’t be left paying for an education that never got to be used in the terrible and tragic case that their student died. Many parents are spending their entire savings paying to put children through schools already, as well as to afford their own lives, so taking out a life insurance policy for your student insures that you won’t have to continue to pay a debt while you grieve for your child. Top insurance companies will cover a healthy college student with student loan debt with a $250,000 for about $10 per month (use our quote tool on the right and see for yourself).
Take A Look at The Type of Debt
If you are thinking about life insurance for your college student, there are several types of debt you should keep in mind. First, student loans from private lenders must still be repaid, even if the student dies. (Government-backed students loans are forgiven in the case of death.) If your child has loans from private lenders, read all of the fine print and find out who is responsible for repaying the debt in case of death; if it is his or her next of kin, you might want to consider a life insurance policy. Another type of debt to take into account when considering life insurance for your student is if you borrowed against your home to pay for their education. If so, purchasing a life insurance policy might be helpful, since paying off the debts against your home will most likely be the least of your concerns if you are grieving a child, and the money received from the policy can help ensure you have a stable, safe place to live in a difficult and unstable time. Finally, also consider if your child has credit card debt on a card that you co-signed for. If so, a life insurance policy can help pay back those debts if something were to happen to him or her.
What’s the Downside?
Ultimately, purchasing a policy for your college student can be a smart move that costs you very little money and helps protect you in case of a terrible tragedy or accident. On the flip side, though, there are some drawbacks to having life insurance for someone so young. First of all, considering life insurance policies can be very grim and disheartening for a young student in the prime of his or her life. It can also put a strain on a relationship between parent and student if the student feels like they are being treated like a financial burden and not a person they love. So, if your college student does not have significant debt, it might be smarter to wait until they are a little older to purchase life insurance, when they can do it on their own time and with their own family’s well being in mind.
If you want to know your options or a list of final expense insurance companies that are available to you, we can help.
Types of Life Insurance
Before you purchase life insurance, you’ll need to decide which type of coverage is going to work best for you. As a college student, you have several great choices. The two main types of life insurance are term and whole. Each of them has different benefits that you’ll need to compare.
The most popular type of life insurance for college students is a term insurance plan. These policies are a temporary form of coverage and they last for the duration of the term that you purchase. You can buy a term plan from anywhere from 1 year to 30 years. Because these plans are temporary, they are going to be more affordable than other options. If you want to get the cheapest life insurance, term is going to be the best option.
The other popular option is whole life insurance. These plans are a permanent form of coverage, which means as long as you pay the premiums for the plan, you’ll have life insurance. These plans also build cash value inside of them that you can invest or use to pay the premiums for the plan. Because you’re a young applicant, the premiums are going to be cheaper, but a whole life insurance policy is still going to be more expensive than a term policy. As a college student, a whole life insurance policy could be a good investment, because you have longer to pay in the premiums, which means that your plan is going to build much more cash value than if you purchase a whole life plan as a 30-year-old.
Getting the Cheapest Life Insurance as a College Student
When you’re looking to get life insurance, it’s important that you get the most affordable plan available. Luckily, because you’re young, your insurance premiums are going to be drastically cheaper than they would if you were 40-years-old, but there are still a few ways that you can trim down your rates and keep more money in your pockets every month. Making a few simple changes could save you hundreds of dollars every year on your life insurance, and as a college student, that can make a huge difference.
The first thing that you should know is smokers are going to pay a LOT more for their life insurance policy. If you’re a smoker, you’re at a higher risk of suffering from a heart attack later in life or being diagnosed with lung cancer. That means that you’re a greater risk to the insurance company and they are going to offset that by charging you higher premiums. In fact, smokers are going to pay twice as much for their insurance coverage versus what a non-smoker would pay for the same sized policy. With some insurance companies, smokers pay as much as triple compared to if they didn’t smoke. If you want to save money on your life insurance, it’s time to kick those cigarettes to the curb.
Another way to save money is to improve your overall health. The insurance company is going to require that you take a medical exam, and the results of that exam are going to impact how much you pay every month. If you want to save money, improving your health is a great way to lower your rates. If you’re overweight, your premiums could go up by 50% or more. Losing weight through diet and exercise can save you hundreds of dollars every year.
The best way to ensure that you’ve found the lowest rates is to compare dozens of quotes before you decide which one is best for you. Every company has different medical underwriting and rating systems that they are going to use when reviewing your application. You’ll find that you could get two drastically different rates from two separate companies for the same sized plan.
Instead of wasting hours and hours calling different companies, let one of our independent insurance brokers do the work for you, or simply use our quote form on the site. You can get access to dozens and dozens of quotes from highly rated companies across the nation. It will save you both time and money.
You never know what’s going to happen tomorrow. You’re young, but life can always throw a curve ball. Don’t wait another day to get the life insurance protection that you and your family deserve. If you have any questions about getting life insurance as a college student, please contact us today. We would love to answer those questions and ensure that you have the lowest rates possible.
Compare rates using our quote tool right on this page, or call us at 888-552-6159 to discuss your life insurance options.