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Middle Ground

Term life insurance offers a safety net as college costs—
and family burdens—rise

October 5, 2009
By Penni Sue Schaefer

Mark and Linda Caldwell Mark and Linda Caldwell, ERIE Customers

It’s no secret: the cost of higher education is staggering. And it continues to rise.

According to, the average cost to attend a private four-year college topped $25,000 per year—up 6 percent in 2008–09. Students at public schools paid less, but the rate of increase over the previous year was higher at 6.4 percent.

The financial impact—and implications—are often only fully realized once parents begin co-signing student loans, according to financial experts.

That was the case for Mark and Linda Caldwell of Fairview, Pa. The couple had witnessed the rise in costs as they began the journey to send three children
through college.

“It hit Mark one day, and he looked at me and said, ‘Gee, you know, if something were to happen to our kids, we would be responsible for all of the loans,’” Linda recalls.

Around the same time, the Caldwells faced some added family responsibilities. When the last of their three children went off to college, Linda’s father and aunt,
who both required medical care, moved in. So, the risks of financial burden
weighed even heavier on the couple.

That realization led them to contact their ERIE Agent at Great Lakes Insurance Associates in Erie, Pa. The solution—a term life insurance policy for each child—helped ease the couple’s worry in the short run and provided an option to their children for continued coverage as adults.

Steven Weisbart, Ph.D., senior vice president and chief economist of the Insurance Information Institute (III), acknowledges that many parents are uncomfortable
thinking about the “what ifs” that can lead them to consider a term life policy in
such a situation. But doing so can offer additional benefits.

“Inexpensive term life policies can serve more than one purpose,” notes the economist. “If parents purchase a policy for a child at college, the child, once graduated, has the option to convert the term policy to a whole life or universal
life policy that builds cash value.

“Parents may also choose to turn the policy over to the child later as a gift,” he adds, “arguably, a very nice one.”

For Mark and Linda Caldwell, the added financial protection may also impress on their children the importance of planning for security.

“Parents are supposed to be responsible for their kids, and that surely doesn’t end when they go off to college,” Linda says. “We bought the policies for our financial protection, but also for theirs. It feels good knowing it’s there.”

If you have questions about how life insurance can help address this need or others, give your ERIE Agent a call.

Penni Sue Schaefer is a journalist and freelance writer based in Conneaut Lake, Pa. She works with college students every day as an adjunct instructor for Allegheny College.

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