No one likes to think about what would happen if they died unexpectedly. But if you have student loan debt, it’s important to consider the financial burden that would be placed on your loved ones if they were responsible for paying off your loans. Term life insurance is an affordable way to protect your family from this burden. In this article, we’ll share two questions to consider if you have student loan debt.
Question #1: How Much Student Debt Do You Have?
As the cost of college continues to rise, more and more students are taking out loans to cover the expense. In fact, there are 42.8 million student borrowers in the United States, who have federal student loan debt. (Source)
While most private lenders offer some form of student loan debt forgiveness in the event of death or disability, this is not always the case. Federal loans, on the other hand, are automatically forgiven upon the borrower’s death.
The national private student loan balance exceeds $140 billion. (Source) If you have private loans, it’s important to check with your lender to see if they offer similar protections. Most private companies do not offer student loan debt forgiveness, so your family would be responsible for paying back the loans. If something suddenly happened to you, your loved ones would be left to deal with your student loan debt.
According to Education Data:
- 34% of adults aged 18 to 29 report having student loan debt.
- Among 30- to 44-year-olds, 22% report student loan debt.
- Borrowers between the ages of 25 and 34 years have an average debt of $33,430.
By understanding your loan, you can be sure your loved ones won’t be held responsible for your debt if something happens to you.
Question #2: Should You Get Term Life Insurance?
In today’s world, having a solid financial foundation is more important than ever. If you have student loans from a private lender, term life insurance provides peace of mind knowing your family is protected should something happen to you. We can customize a term life insurance policy to meet your needs and your budget.
Term life insurance offers protection for you and your family as you continue to pay off your student loans. The policy stays active for the term. Should you pass away during this term, your family member would receive the coverage amount to pay off the remainder of your student loan debt. This gives you peace of mind of knowing that your loved ones will not be burdened with your debt in the event of your death.
While insurance costs are NOT affected by the economy, pandemics, or supply/demand, many factors are important in providing a life insurance quote. Age, health, gender, lifestyle, occupation, and family health history are just a few of the underwriting factors that help determine your premium. Understanding these factors can help you get the best possible rate on your insurance policy.
It’s also important to know that there is NO one size fits all when it comes to life insurance. The type and amount of coverage you need depend on your unique circumstances.
What Factors Play A Role In Buying Life Insurance?
Age: Many people procrastinate when buying insurance, believing they will have plenty of time to do so later in life. However, one of the most important factors in determining insurance premiums is the age of the policyholder.
In general, younger people are seen as being at less risk of developing health problems, and as a result, their policies tend to be less expensive.
Additionally, young people are more likely to have longer coverage periods and to make regular premium payments, which means that they can be a valuable source of revenue for insurers. As a result, buying insurance when you are young is often cheaper.
So if you have been putting off getting coverage, now is the time to act.
Health Conditions: Another important factor is your health. If you have any pre-existing health conditions, you can expect to pay a higher premium than someone who is healthy. This is because people with health conditions are more likely to make a claim on their policy.
It’s best to get coverage while you’re young and healthy. Waiting could end up costing you a lot more in the long run.
Lifestyle Habits: Term life insurance is one of the most important investments you can make – yet so many people forego this crucial coverage. There are a variety of factors that impact the cost of term life insurance, but health conditions are perhaps the most important.
People who smoke have higher chances of developing life-threatening diseases. If you fall into this category, you will be required to pay a higher premium, sometimes 50 percent more than normal. But the good news is that you can improve your health status by quitting smoking.
Gender: Getting term life insurance is important, and there are a number of factors that impact the cost of premiums. One of the most significant factors is gender.
In general, males are more likely to pay higher premiums than females because they are perceived to be at higher risk and have a lower life expectancy. This may not be fair, but it’s the way the insurance world works.
That’s why it’s especially important for men to get coverage sooner rather than later. The sooner you get covered, the lower your rates will be.
Policy Term: Many people put off buying life insurance, assuming that it is something they can always do later. However, there are a few good reasons to get life insurance sooner rather than later. For one thing, life insurance costs increase as you age. This is because the risk of death increases with age, and insurance companies account for this by charging higher premiums.
The longer the policy duration, the lower the premium.
Occupation: If you are employed in a high-risk industry such as construction, mining, or shipping, you will be charged a higher premium. The premium would be lower for people employed in office jobs who are less at risk of having an accident at work.
Family History: Family history is important because certain diseases are considered hereditary. If you have a family history of such diseases, you could be asked to pay a higher premium than others. Certain diseases, like diabetes, also impact the cost of term life insurance. If you have diabetes, you may be asked to pay a higher premium than someone who doesn’t have the disease.
Who has the best life insurance rates? Explore this topic more!
In Conclusion: Student Loan Debt, Term Life Insurance, and Peace of Mind For Your Future
Many people believe that life insurance is something that is only necessary for people with dependents, but this is not the case. Everyone should have at least a basic life insurance policy in place. While a life insurance policy’s death benefit can help provide financial security for your loved ones, it can also cover final expenses and outstanding debts, including your student loan debt.
If you have student loan debt, you need life insurance. It’s as simple as that. Your death benefit can be used to pay off your loans, so your loved ones don’t have to deal with the financial burden. Term life insurance is an affordable way to make sure your debts are taken care of in the event of your death. So, if you have student loan debt, don’t wait—get life insurance today.
Contact Duff Agency for a customized quote. Don’t wait to get coverage. If you’re considering buying life insurance, now is the time to do it.
