Whether you have signed a student loan with your loved ones or your child to help him/her in financial education as a co-signer, you have accepted the equal responsibility to pay that loan back. While people become co-signer in student loans with the best of intentions, things may not always go as planned. But a growing question is that what happens to this debt if the student passes away?
While the death of your child (student) or loved ones is already the worst incident, huge unpaid student debt can make the situation even worse for the family of a student. This is where life insurance comes into play and eases the fears associated with the unpaid student loan that you have signed as a co-signer. It protects the family or an individual from shouldering a huge education debt in this awful situation.
Below are some solid reasons why you should get life insurance if you have signed a student loan together with your child or a loved one.
Not all Student Loans Discharge with the Student’s Death
Before you cosign a student loan, make sure to understand that there is a huge difference between federal student loans and private loans. Federal student loans are highly recommended by experts as they discharged if a student dies. But private student loans are required to pay back either by the co-signer or the family of the deceased student. That is the reason if you are about to cosign a student loan, ensure to go through the fine print and understand the possibilities in near future. If you have co-signed a loan, having a life insurance policy can help you pay off the student loan debt you may be held accountable for after your child passes away.
Life Insurance offers Financial Protection if the Student Dies without Paying off the Debt
Due to some major financial responsibilities, some people are ready to cosign student loans with their family members or other special persons to help them fulfill their educational needs. Such connections are usually lifelong and lick each other’s finances. But, things can go worse if a student dies and the loan still needs to be paid. The cosigner or the family of a deceased student has to pay the loan back. If there is no enough money to pay off, it could be huge financial trouble for the family or a co-signer. Hence, life insurance on the student is the only way to ease the unlikely situation. You can use the insurance coverage amount to pay off the student debt and manage other expenses like funeral and memorial services etc. However, you should invest in the right insurance policy to make sure you will get enough coverage to protect your family from financial troubles.
Buying Life Insurance as Earlier as Possible is a Good Idea Anyway
Getting life insurance at a young age is always a good idea. That is the reason, we recommend students buy life insurance as soon as possible as they can enjoy affordable premium payments because the cost of insurance tends to rise with the age. By buying life insurance at a young age, one can save a lot of bucks in terms of paying lower premiums and get a lot by insurance policy even when studying in college or university. Getting a high value and long-term insurance as early as possible is a wise decision that parents can make to protect themselves from financial troubles in near future. Life insurance is the best choice for situations you cannot predict. A death, accident, or serious injury can happen anytime in life. And life insurance can offer you enough coverage to protect you or your family financially.
Since getting life insurance is the best way to ease complications associated with situations you cannot predict, it is very much important to understand the different life insurance policy types and insurance providers before you make a final decision. Always compare different policies and policy providers to make sure you are making the right choice.