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The most common reason to get life insurance is to help make sure that life expenses can still be covered after the death of a family’s income earner. This usually means insuring life of the mother or father to help cover a mortgage or college and other major costs of the surviving family.

So why would you insure the life of a 22 year old college student?

We’ve been getting inquiries about this topic a lot recently. It turns out there are two good reasons to do this.

First, recent changes in the law mean that federal student loans are excluded from bankruptcy protection. This means that if someone facing financial hardship has to declare bankruptcy, student loans won’t be included under the bankruptcy program and the full amount of the loans will remain due.

How does this affect you? The income details of parents are factored into a college students federal financial aid options until the student is 26, in most cases. Student loans form the bulk of financial aid and many, if not most, parents end up co-signing loans for students.

The average student debt in DC is $41,000.The result is that in the event of the death of the student, the parents will have the additional hardship of having to still re-pay those loans.

If that weren’t enough, the second reason to get insurance is to set them up well going forward. If you get a 30-year policy, when your child is out of school, working and making a good living, she could refinance those loans to eliminate the parents’ obligation then change the beneficiary to her spouse and keep an inexpensive policy into her mid-50s.

Looked at that way, that’s an argument to increase the coverage amount to $200k or $300k, more in line with what a person might need in their 30s and 40s when she has a family of her own.

Post Author: Steve Sarantos

Steve Sarantos spent his first 20 years after education, working in the auto industry, retail, and importing from the orient. Most of the positions were sales, or negotiating with vendors, which gave him a wealth of experience working directly with people and what it takes to make things work for both parties.
When he decided to go into business for himself, insurance seemed like the perfect venue. Help people with something most knew very little about, get the right product for the right price. Everyone has to have it in or form or another, so all you have to do to be successful is be honest, keep your promises, and offer people what they want. Someone to talk to about insurance that will give them choices and straight talk.
After starting Reliable Insurance Network from scratch in 1996, it is now a thriving family business with clients in MN, WI, and AZ. Reliable Insurance Network continues to refine it's processes, use technology to stay flexible, and let clients work with them in whatever way is comfortable for them, and provide top companies and rates along with superior service so everyone is happy.