Ever wonder what would happen to your student loans if you died? Well, that all depends on what type of student loans you have. Any student loans through the federal government will be forgiven in the event of your death.
But if you have private student loans, they are not always forgiven after death. This is the main reason why those with student loans should consider getting a life insurance policy. The following are ways to help out your loved ones with a life insurance policy covering your student loans.
Let Your Co-Signers Off the Hook
If your parents were the co-signers on the loan, then in the event of your death, your parents would be responsible to pay off the rest of the loan. With a life insurance policy with your co-signer as the beneficiary, you can relieve them of the burden of having to pay off your debt. If the co-signer was willing to put their finances at risk to help you get a student loan, the least you could do is provide them a way out of it in the event of your death.
Protect Your Spouse
Some student loans can be discharged to your spouse in the event of your death. This is especially important if you bring in the most income between you and your spouse. Would your spouse be able to make those monthly payments without your income? A term life insurance policy can provide your spouse with protection against your student loan payments.
Not only do you have the opportunity to help your family or loved ones during a hard time, but you wouldn’t even have to pay that much. Let’s say you have $30,000 in student loans at an interest rate of 4.5%. Over a ten year period, you would pay a total (with interest) of $37,310. So to get that covered by a term life insurance policy, you could take out a ten-year term for $50,000 for a little bit of leeway, and pay somewhere between $7 and $9 a month if you are in good health. That’s about two cups of coffee a month you’re giving up to provide peace of mind to the people you love.
At LifePlan Financial, we pride ourselves on our quality work, our honesty to our clients, and the reliability we provide. Getting life insurance doesn’t have to be a hassle when you use LifePlan Financial. Contact us today for any questions or get an instant term life insurance quote to get started.