The cost of a college education could be several thousand dollars for a single year. Few parents could afford to pay such high tuition rates, especially since many have been forced to break into their savings during these difficult financial times. In order to ensure their children have the best possible chance for success, some have turned to student loans to pay for their son or daughter’s education.
After cosigning the loan application, you should consider purchasing life insurance for your child in the amount of the loan. Why might this be important? Some student loans contain a forgiveness clause that states the debt is forgiven if the student passes away. Unfortunately, not all loan contracts have this section written in, which means you could be left paying tens of thousands of dollars in student loans after losing your child.
Obtaining a life insurance policy in your child’s name could prevent such an unhappy circumstance from occurring. Thanks to his or her youth, the coverage should be very affordable. While it is your every hope that you never have to receive the benefit, having the insurance in place should the worst occur could prevent a family tragedy from resulting in a family bankruptcy.