Recommend a life insurance company for college age child?

[wishesuponastar]

My daughter is going to college this Autumn and we need to get her a life insurance policy because she has to take out loans for college. Any recommendations would be much appreciated. Oh, and how much is your monthly premium?

 

[MariMama]

My daughter is going to college this Autumn and we need to get her a life insurance policy because she has to take out loans for college. Any recommendations would be much appreciated. Oh, and how much is your monthly premium?

I have never heard of any such thing.

 

[Christine]

I have never heard of any such thing.

It is recommended. If the student loan borrower dies, the loans are on the parent.

 

[MariMama]

It is recommended. If the student loan borrower dies, the loans are on the parent.

If the student borrower dies, government loans die with them. If they go through a private borrower, then yes, someone is on hook to repay the loans. That is probably why I've never heard of such a thing. Everyone I know has federal loans.

 

[wishesuponastar]

It is recommended. If the student loan borrower dies, the loans are on the parent.

Yes, that is why we want to get life insurance.

 

[rwdavis2]

Yes, that is why we want to get life insurance.

Did the loan documents state this? Our daughter is getting student loans for grad school and we saw no requirements for us to be on the hook if something happened. Unless you co-signed for the loans.

 

[gwynne]

It is recommended. If the student loan borrower dies, the loans are on the parent.

If the student borrower dies, government loans die with them. If they go through a private borrower, then yes, someone is on hook to repay the loans. That is probably why I've never heard of such a thing. Everyone I know has federal loans.

Yes, that is why we want to get life insurance.

Actually it's not a universal fact that cosigned private student loans will have to be repaid by the cosigner if the worst happens to the student. For example, Wells Fargo has no such policy. It is prudent to become familiar with the policy of your student's lender. And it's probably a good idea to print it out and file it away with all the other documents.

From their website:
"In the event of the death of the student, the loan will be forgiven and the borrower and cosigner will not be responsible for repayment. Loan forgiveness may also be available based on the total and permanent disability of the student."

https://www.wellsfargo.com/student/cosigner/
(Click on the cosigner release tab to read.)

 

[gwynne]

Did the loan documents state this? Our daughter is getting student loans for grad school and we saw no requirements for us to be on the hook if something happened. Unless you co-signed for the loans.

Your daughter's graduate school loans shouldn't have anything to do with you unless you co-signed.
Graduate school loans are different than undergrad loans.

 

[smiths02]

You only need insurance on her if she co-signed.
We had good luck buying TERM life insurance from zander insurance http://www.zanderins.com/default.aspx

 

[NHdisneylover]

I've never heard of this either--but, like a PP, my DD only has federal loans. I wouldn't be OK with her attending somewhere so far out of our price range that we needed private loans to cover it. thankfully she did not have her heart set on anything like that either.

Good luck finding something that works for you OP--there are so many details to deal with that first year, this is just one more hassle and expense, sorry.

 

[The Mystery Machine]

Good for you for thinking forward. Very smart move IMO.

We were not able to get any life insurance back in the day for older dd since she in "uninsurable" do to her heart defect. I wonder if that has changed?

Younger dd finished her freshman yr of college and our Parent Plus loans are minimal, since most of her college is scholarships and her Stafford Loan (her responsibility).

 

[tvguy]

Clearly there is some information missing. Assuming she is just starting college, she should be able to get exclusively Government loans, and those would be forgiven if something happened to her.
However, to your point, get quotes from the insurance company that you have your auto and home owners insurance with. And most colleges also have preferred providers for student life insurance. Expect quote of about $15 a month for a $250,000 policy, if you need one that big.

 

[NHdisneylover]

Clearly there is some information missing. Assuming she is just starting college, she should be able to get exclusively Government loans, and those would be forgiven if something happened to her.
However, to your point, get quotes from the insurance company that you have your auto and home owners insurance with. And most colleges also have preferred providers for student life insurance. Expect quote of about $15 a month for a $250,000 policy, if you need one that big.

That is false--the maximum amount that a freshman can borrow from the federal government is $5500 per semester ($9500 if she is manages to be legally not dependent on her parents--but that is hard to do assuming she is just out of highschool). Plenty of schools cost much more than that, even with scholarships, etc--especially more expensive private schools or out of state schools. Now, the parents can add to that with Parent PLUS loans if they have good credit and are willing to cosign, but many are not willing, or lack the credit.

https://studentaid.ed.gov/sa/types/loans/subsidized-unsubsidized#eligibility

 

[The Mystery Machine]

Clearly there is some information missing. Assuming she is just starting college, she should be able to get exclusively Government loans, and those would be forgiven if something happened to her.
However, to your point, get quotes from the insurance company that you have your auto and home owners insurance with. And most colleges also have preferred providers for student life insurance. Expect quote of about $15 a month for a $250,000 policy, if you need one that big.

What planet do you live on, lol...

Most of us have to take out Parent Plus loans.

 

[The Mystery Machine]

That is simply false--the maximum amount that a freshman can borrow from the federal government is $5500 per semester ($9500 if she is manages to be legally not dependent on her parents--but that is hard to do assuming she is just out of highschool). Plenty of schools cost much more than that, even with scholarships, etc--especially more expensive private schools or out of state schools. Now, the parents can add to that with Parent PLUS loans if they have good credit and are willing to cosign, but many are not or lack the credit.

https://studentaid.ed.gov/sa/types/loans/subsidized-unsubsidized#eligibility

That is PER YEAR not semester. It is 2750 per semester. Obviously it goes up based on student standing of FR, SO, JR, SR.

 

[NHdisneylover]

That is PER YEAR not semester. It is 2750 per semester. Obviously it goes up based on student standing of FR, SO, JR, SR.

oops--I am so used to thinking in terms of semesters--but you are correct of course.

 

[RitaE]

As others have said, check the loan documents. It used to be almost certain that co-signors were still obligated on Student Death but there has been movement away from those standards in recent years.

Given her age and assuming no major health issues, a very long term (30 years) policy should be dirt cheap. It's a good time to take it out and then those low rates can follow her through a large portion of her adult life. I'll also point out that many children have life insurance policies (mostly to cover funeral expenses) as riders on their parent's policies. When they reach adulthood, those policy also sometimes expire. So given the low cost, it's a good time to take out another $10k or so if the family finances wouldn't easily handle a catastrophe.

As for a company, I think ours might be with Banner Life? I'd really just contact a Broker and compare rates amongst the reputable companies.

 

[tvguy]

That is false--the maximum amount that a freshman can borrow from the federal government is $5500 per semester ($9500 if she is manages to be legally not dependent on her parents--but that is hard to do assuming she is just out of highschool). Plenty of schools cost much more than that, even with scholarships, etc--especially more expensive private schools or out of state schools. Now, the parents can add to that with Parent PLUS loans if they have good credit and are willing to cosign, but many are not willing, or lack the credit.

https://studentaid.ed.gov/sa/types/loans/subsidized-unsubsidized#eligibility

My DD's best friend some how cobbled together $50,000 in Government loans this academic year. But she is independent from her parents, and her University managed to find all kinds of special loans based on her ethnic background etc.

 

[tvguy]

What planet do you live on, lol...

Most of us have to take out Parent Plus loans.

Earth. My kids are 25 and 29, and I lived it.

 

[RitaE]

My DD's best friend some how cobbled together $50,000 in Government loans this academic year. But she is independent from her parents, and her University managed to find all kinds of special loans based on her ethnic background etc.

Most College Freshman are not Independent Students. Dependent Student Undergraduate Financial Aid is completely different.