The Less Known Importance of Life Insurance for Parents & Students Who are in College or Plan to Attend College
If you are a parent or a student around college age, you are probably well aware of the cost of higher education these days. When you look at the numbers it is just staggering how much a college educations costs in 2013. According to the College Board, the full cost of a year at a public four-year school has increased an average of 83% and private universities saw a 74% increase, in just the past twelve years alone.
What are the average costs for college in 2013?
Take a look at the many interesting statistics about the costs associated with a college education today.
As you can see above the average cost for just one year at a public college is over $35,000 and over $43,000 for a private university in 2013. These are just today’s numbers; imagine what prices will be in another decade if the costs continue to increase at the same pace.
Importance of life insurance for parents
If you plan for your child to attend college it’s important that you work hard and save money today. But what if you were to unexpectedly pass away? Would you have enough money set aside for your son or daughter to go college when they are 18? How about if you have a few children that plan to attend college, do you have enough money for each child to attend for all four years? Unfortunately, most Americans don’t have the funds put away for their children’s higher education, especially in this economy.
However, this issue can be easily prevented by purchasing a life insurance policy. If you were to suddenly pass away thus preventing you from saving enough money in the future for your children’s education, the life insurance policy will guarantee that there will be enough money available for your children to attend college and have a better opportunity to achieve all of their life’s goals.
Another problem that many parents are not aware of deals with student loans. If you co-sign for any private loans and plan to help your son or daughter pay back the loan debt, it is imperative to have a life insurance policy on both of you. If one passes away the other party will be left solely responsible for paying back the debt, whereas if you had a life insurance policy for the amount that would cover the amount of the loan and it would be paid off if one were to pass away.
Importance of life insurance for students
One of the quickest growing segments of Americans purchasing life insurance today is college students and recent college graduates. The reason for this is to cover student loan debt. Since many students only qualify for a limited about of Federal student aid money, many students rely on private student loans to finance their college education. Unlike the Federal student loans, the private loans will typically require a co-signer (most often the parents) in order to qualify for the loan. Also unlike the Federal program, with private student loans if the student were to pass away, the parent will still be responsible for the debt if they co-signed. (A sad first hand example can be read here: http://www.nj.com/business/index.ssf/2013/04/bamboozled_painful_college_deb.html) Many parents do not know this or believe it will be an issue for them. However, it does happen and it is sad and unfortunate when it does. Don’t be put in that situation. Life insurance for a person of college age is laughably cheap. We are talking for $250k, $10 a month for a 20 year old male for in good health. When you compare that to the $35k a year for college, the $120 a year to cover the debt is a no-brainer and should be a part of every college student’s financial plan.
The bottom line
You can see how a good life insurance policy should be a necessary part of every student and parent’s college financial plan. With tremendously low costs, especially for students, there is no excuse to expose yourself and your loved ones to the risks of lingering college debt.
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Photo: FYS Class