At some point in life after graduation or after some time working, the urge of joining a grad school may be inevitable. There are various benefits of joining a graduate school; it can be a career boost or even a step to greater heights in life. The only drawback of going to a graduate school is the cost. In financing my studies at graduate school, I had to take student loans.
Anyone thinking of joining a graduate school is most likely aware of student loans. Many scholars take the loans to make ends meet. Most of the people, who take student loans young and single, normally the loans are a personal consideration. However, joining a graduate school married with children is not the same thing. Taking a student loan changes from an individual to a family concern.
Having a family and being single with a loan co-signer is the same thing while taking student loans. Have you ever thought you might need a life insurance in such circumstances?
When One Dies, What Happens to Student Loan Debt?
Though not a pleasant thought, thinking of what happens to such debts when one is gone is crucial. Hence the need for a life insurance that covers the student loan.
If one dies, the student loan debt will most likely be a burden to the co-signer or the family. Sadly, whether they co-signed the loan or not, a spouse will be liable to clear those student loan debts. The deceased’s spouse, as well as the co-signer, may be left in a tight spot. The tight spot is because they will be liable to making repayments for the student loans debt.
The situation may be even worse if the couple resides in a community property state. Why is this? In such cases, any debts incurred during the marriage is liable to both spouses. Currently, the nine community property states are Texas, New Mexico, Nevada, Louisiana, Idaho, Arizona, Wisconsin, Washington, and California.
It is always good for one to be conscious of the backlashes of the debts they have if they were to die. This consciousness is irrespective of whether one is married and with financial dependents, or just single and worry-free.
There are Different Rules for Different Lenders
Depending on the lenders of the student loans, the repercussions will be different upon one’s demise. For those people receiving only the federal student loans, upon their death, the loan is completely discharged. This statement is according to a federal death discharge. However, to secure the expected earnings after graduate school, purchasing a life insurance cover may be worthy. It also gives one some peace of mind.
Things may turn to be trickier for scholars if the federal student loans fail to cover all their tuition needs. Taking out private student loans may be the only viable option.
Formally, there is currently no any death discharge to private student loanees. Nevertheless, some private student loaners may give death discharges, but there are no standard rules.
Additionally, many private lenders require co-signers for loan approvals. If no death, discharge is issued for a private student loan, the deceased’s spouse, the parent or whoever is the co-signer will be left with a hefty debt to pay. How would the spouse of the deceased maintain the family’s day-to-day lives with debts and less income for the household?
Should You Get Life Insurance?
The idea of thinking about your death could be tormenting. However, leaving your dependents in troubles, you could have shielded is even more tormenting. The idea of life insurance is thinking of the future and protecting your dependents.
Having financial dependents together with the notion of joining a graduate school, is enough reason to consider life insurance. This reality should not be overlooked. It is a way of protecting and securing your family’s future.
If you are interested in only purchasing a life insurance policy to cover the student loans debt, a term life insurance should be a consideration. This way one can align with the selected repayment term.
Another good thing about term life insurance is affordability. With the possibility of choosing a term, that best suits your repayment capabilities, graduate school life and after-life should be hassle free.
Life Insurance and Grad School
Dealing with financial burdens of a student loans debt should be the last thing a bereaved family should have to face.
Being married and going to a graduate school are intertwined. You are taking on schooling to give a better life to your dependents. Therefore, your demise should not turn their lives into mayhem. If private student loans are necessary, consider a life insurance policy. Life insurance is also a solid investment for you and your family.