A few weeks ago, I read in article in the Wall Street Journal about a family who lost their 25 year old son in an accident but were still wrestling with his student loan debt cause they had cosigned on his loans. In addition to the pain of losing their son, they were all working extra jobs to try to keep up with the loan payments. While no one wants to think about something like this happening in their family, it is important to plan for the worst and hope for the best.
If you have a student preparing to go back to college and have cosigned for student loan debt or have taken out parent loans, please consider getting life insurance on the student. A term policy on a college student is extremely inexpensive and can cover all the costs of loan repayment should something happen. Reading that story just broke my heart. Grieving the loss of a child is hard enough but to be remembered of that loss every time you have to make a student loan payment; I can’t even imagine what that poor family is going through.
Make sure you shop around for life insurance. Many student loan providers will offer you life insurance in conjunction with the loan. This is generally not a very good deal. You will most likely do much better on the market.