Your son or daughter is heading off to college for their first year, and that includes the new experience of student loans. Not everyone has had the opportunity to save the money needed to pay college.
Whether you need a loan for the full amount or just a partial amount, both the new student AND their parent(s) will be on the hook. Co-signing on your child’s loan means being obligated to the debt, should something happen to your child. In this situation, parents that chose not to or could not afford to pay for college while their child was living, would now be forced to pay the remaining balance of the loan God forbid the unthinkable were to happen.
Let me share with you how life insurance can not only protect you from this burden, but protect your son or daughter long term, too. When children turn 18 years of age, they can qualify for a preferred rate when it comes to life insurance. This means, for example, a $250,000 term life insurance policy could cost as little as $15 a month for a 30-year term.
Here is our family plan and how we put it into place as each child left for college. Let me explain why we took out a $250,000 term policy for 30 years and why we chose 30 years. The plan was that, if anything were to happen to any of our four children, the $250,000 would not only pay for their remaining loan balance, but also go towards paying the remaining student loans of their siblings. We felt this would be a great way for their siblings to remember them by. Fortunately for us, all of our children survived college, and three of them are now married.
This is where the 30-year plan came into place. As three of the four got married, we changed the beneficiaries on their policies from my wife and I (as sole beneficiaries), to co-beneficiaries with their spouses. Once their student loans were fully paid, the spouses became the sole beneficiary. Now they will be able to protect their new families and our new grand-kids, should tragedy occur.
Our youngest son is now a Marine helicopter pilot. While we pray for his safety daily, as we do for all of our children, we have a plan in place for his scenario as well. We call it our “Legacy Plan.” If something were to happen, his life insurance would cover any unpaid student debt, then any remaining student debt of his siblings. Any remaining amount would then go to fund the tuition of his nieces and nephews that choose to go to college. In memory of him.
If you’d like to know more about putting a plan like this in place for your family, give us a call today. (317) 867-5433