Why Grad Students May Need Life Insurance

Most people think that life insurance is something you think about once you have a job and start a family. While that is the most common time for one to look into insurance, looking for a policy early has its benefits and may even be necessary for some. 

Graduate students are one such case. Typically grad students will have taken out loans – a debt that may transfer to your co-signers or loved ones in case anything happens to you. Life insurance can help your loved ones offset these debts and pay for other end-of-life expenses down the line.

In this guide, we will discuss in detail why graduate students should look into life insurance!

Should Graduate Students Get Life Insurance?

Taking out student loans is one of the most common ways people pay for graduate school. Other forms of loans are common at this stage as well, including car loans or even mortgages. Whether you’re a cosigner or the sole borrower, this inheritable debt may impact those closest to you in the event that you pass away. Life insurance is one of the best ways to make sure you don’t pass on this burden in the event of your untimely death. 

Who Should Get Life Insurance?

If you’ve taken out loans, you should start thinking of financial safeguards in case you are not able to pay them off before you pass away. For example:

Cosigners

Cosigners mutually agree to take responsibility for paying off the loan, meaning if one of you dies, the debt will be transferred entirely to the other. If you have or are a cosigner on a private student loan, you or your cosigner may want to consider life insurance as protection.

Sole Borrowers

If you’re the sole borrower on a private student loan, car loan, or mortgage, the financial burden could fall on your loved ones if you have no life insurance policy to cover it. Lenders might also collect debt from private student loans from your family estate or by selling off your belongings. If your estate has no funds or if you’ve taken out a federal student loan, your debt may be discharged.

People With Dependents

Dependents are those that depend on your income to survive. This may be a spouse, child, key employee, or business partner. If you pass away, a life insurance policy will help replace your income for your dependents. 

This can lift the weight off of them with regards to child care, rent, and utilities. It can also ensure that funeral costs and debt don’t eat into their inheritance or life savings.

Students Who Want To Start A Family

If you plan on or are starting a family, then life insurance is a good way to ensure they have financial protection in case anything happens to you. Insurance can cover the cost of raising children until they are independent, which includes tuition and other expenses.

Locking in a plan early also allows you to avail yourself of competitive rates. The younger you are when you get a policy, the lower the risk category you’ll fall under, which means better quotes on insurance premiums. 

How Much Coverage Should You Get?

The amount of coverage you get is just as important as the type of policy. You’ll want to make sure you’re getting enough to cover all your needs, which includes paying off debt and providing for your dependents. However, you also don’t want to take out too much, which can leave you paying higher premiums than necessary.

While you’re in graduate school, you may not have a stable job yet. This can make applying for insurance a bit tricky since insurers want you to provide evidence of insurability – you have to show that your income is proportionate to the amount of coverage you apply for. 

Applying for insurance before you have a stable career means that insurers have to go off of other factors to determine the amount they can give you. These include:

Projected Income 

Insurance companies are sometimes lenient and will make an offer based on your future projected income. You’ll be asked for details about your expected employment. 

If not, they may make an initial offer with the chance to increase your coverage after you get employed. These decisions will entirely depend on your case and those handling you, but it’s important to know that these options are available.

Parent’s Policy

Some life insurance companies use your parent’s policy to determine the amount of coverage they’ll offer you. It’s unlikely that you’ll get the same number, but this is a good option if you need to provide your insurers with financial justification.

The Bottom Line

Though life insurance may not be the top priority on your mind during graduate school, you may find yourself in situations where it’s beneficial to get it now rather than later. 

Don’t stress about qualifying for or getting coverage without a stable job – there are still lots of options for you while you’re in graduate school! Just be mindful of your unique needs, and do your research before settling for the first attractive policy you find.

If you’re not sure how to get started, don’t worry. Our team of professionals at Wesley Insurance, LLC can give you all the assistance you need. Contact us now to find out what you can do to secure your future!