Most people want their kids to go to college and be successful. But sending your kids to college can lead to huge depts. Student loans are in the news these days as more people are having difficulty dealing with paying back theses loans.
Owing a student loan is bad enough, but what happens if tragedy strikes and there is a death. Parents could be left with a mountain of dept. In order to at least be prepared should the worst happen, it might be a good idea to take out a life insurance policy.
Plans are relatively inexpensive. A basic plan with up to $250,000 in coverage can cost as little as $15 a month for a young, healthy college student or recent graduate. To put it into perspective, you would probably be paying and average of $200 a month on a student loan if you were stuck with it.
Although nobody wants to think about this happening to them, it does happen. There are cases of parents being hit with a $200,000 student loan bill and it can be a nightmare on top of the dealing with the death of their child they now have to deal with this.
Federal student loans are forgiven by the lender when a borrower dies, but private lenders aren’t required to provide such relief. With that in mind, looking for as much federal aid as possible first before going to private lenders is key.
But things have started to change as more of these cases have come to light. Some private lenders have recently started providing relief when a primary borrower dies. So, it pays off to shop around for a lender that does forgive in case the borrower dies.
If you still want to consider life insurance, look for term life which is a temporary policy where you can choose the length of coverage.