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Many families wonder if they should get student life insurance when their son or daughter goes to school. The answer is: Perhaps.
There are some situations where it can really make sense to get life insurance as a student. However, for many students, it is simply an unnecessary expense for later in life.
In these cases, you should take out student life insurance.
When does a college student need life insurance?
There are three main situations in which a college student needs life insurance:
- Private student loans
- Relatives
- Support from parents
Private student loans
If a college student took out private student loans, a cosigner was most likely required. 90% of all private student loans have a cosigner. Should the student die, the cosigner becomes legally responsible for the loan.
In such a situation, life insurance can be extremely beneficial as the sum insured can cover the debts.
Relatives
If the student has children of their own, life insurance can be a good idea. These children are dependent on their parents, and even if these parents are students, their death can be a financial burden for the family.
Someone will have to take care of the kids. They will have expenses. They may want to go to college one day, and ideally someone would pay for that. Life insurance can help with all of that and protect your family from the financial burden that comes with raising those loved ones.
Support from parents
Some parents spend a lot of money to finance their student's education. In some cultures, it is traditional for the child to take care of the parents. If something happens to the student, this plan could be disrupted and the parents could face financial difficulties. Life insurance can also provide protection in this situation.
What type of life insurance should a college student have?
A college student should really only need term life insurance. Term life insurance is great – you pay a set amount each month for the term (usually 20 or 30 years) and get the coverage. As a college student (or young adult in general), you are usually healthier, so your insurance premiums are much cheaper.
Related: Term life insurance vs. whole life insurance
How much insurance do you need? Most students probably only need $100,000 or less. If you have large student loans or dependents, you may opt for more.
With companies like Ladder, you can get $100,000 worth of life insurance for just $5 a month.
Compare all your options here: The best online term life insurance companies.
People also ask
What type of life insurance should a college student have?
College students should purchase term life insurance large enough to cover their debts and provide for their dependents, if any.
Should students take out life insurance?
It depends. For college students who have private student loans, dependents, or whose parents rely on them for support, life insurance can be a smart investment.
Why don't college students need life insurance?
Many college students do not need life insurance if they do not have private loans or are dependent on their support.
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