I was speaking with a colleague of mine the other day and the subject of college loans came up. It occurred to us that with the new stricter lending regime, it is probably more important than ever for a parent to consider getting life insurance on a child of theirs if they are co-signing a college loan.
Most college loans are no longer dischargeable in bankruptcy or upon the death of a child. So if you are co-signing a loan, consider taking out a life insurance policy on your child to pay off the loan in the event something happens to your child. As always, the larger the policy you obtain, the more worthwhile it is setting up a life insurance trust.
5 comments:
I don't know about getting life insurance just because the kid will be taking out a loan for college, but that is news to me that loans aren't dis chargeable.
Excellent blog! I really love how it is easy on my eyes and the facts are well written. I have subscribed myself for latest blog posts.
Child Life Insurance
life insurance right now is really important in case of emergency..but I don't understand why it is necessary to have life insurance when taking a college loan?
Dear Kylee,
Thanks for your comment. It is important to get life insurance on your child only if you are guaranteeing the loan. Many college loans require a parent to guarantee the loan in case the student dies or doesn't pay it back. Imagine having your child die and then being responsible for a loan you can't pay off? Life insurance for students is a VERY cheap way to hedge against this possibility.
Excellent blog! I really love how it is easy on my eyes and the facts are well written. I have subscribed myself for latest blog posts.
Child Life Insurance
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