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Life Sense

Consider Life Insurance for Student Loans

Seven out of 10 college students graduated with debt in 2012. For those with loans, the average debt load was $29,400. Meanwhile, many other students had loans that reached high into the six figures.

Those numbers are concerning for recent grads. They can also be troublesome for anyone who cosigns on a student loan. If the unthinkable happens–the student or graduate who took out the loan passes away before it’s paid off–the cosigner is responsible for the outstanding debt.

This is especially true for private loans: While many federal student loans let a borrower’s cosigners complete paperwork releasing them and the estate from the debt, many private student loans do not. What’s more, in community property states like Wisconsin, surviving spouses are often held responsible for a deceased spouse’s outstanding loans.

Without adequate protection, the pain of losing a loved one could be intensified by the financial burden of paying for a dream that ended too soon.

To get an idea of what this could mean for you and your family, read the real-life tales of some families dealing with this unfortunate and costly situation.

Life insurance for student loans

A financial hardship will only make the devastation of losing a loved one that much more stressful and difficult. That’s why life insurance for student loans is something cosigners should consider. A life insurance policy can provide the funds needed to eliminate or reduce a student loan debt in the event the student or graduate passes away before the debt is satisfied.

Term life—a type of life insurance that offers coverage for a specific number of years—is a good choice. Term life is typically the most affordable option. (At Erie Insurance, rates can be as low as $11/month.*) Once in place, the affordable rates will not increase for the length of the plan you choose. Young adults can lock their life insurance rate for as long as 30 years.

There are other benefits to a term life policy. For starters, it guarantees the young adult’s insurability in the future. This means he or she can be guaranteed coverage by converting the term policy to a permanent policy later in life — even if a health condition which normally precludes coverage develops later. **

A permanent life policy lets the young adult accumulate cash savings throughout his or her entire lifetime. Plus, the new premium can be guaranteed for life.

To learn more about the protection and peace of mind life insurance for student loans can offer, talk to a local Erie Insurance Agent. He or she can explain some affordable term life options from Erie Family Life. Some do not even require a physical examination.***

*Rate reflects the best underwriting class available and is subject to underwriting approval. Rounded to the nearest whole dollar.
**The term policy and conversion privilege must be in effect at the time of conversion. Subject to age and plan limitations.
***May require answering health-related questions.

Cosigners can get needed protection (and peace of mind) with life insurance for student loans. /blog/life-insurance-for-student-loans Erie Insurance

ERIE® insurance products and services are provided by one or more of the following insurers: Erie Insurance Exchange, Erie Insurance Company, Erie Insurance Property & Casualty Company, Flagship City Insurance Company and Erie Family Life Insurance Company (home offices: Erie, Pennsylvania) or Erie Insurance Company of New York (home office: Rochester, New York).  The companies within the Erie Insurance Group are not licensed to operate in all states. Refer to the company licensure and states of operation information.

The insurance products and rates, if applicable, described in this blog are in effect as of August 2014 and may be changed at any time. 

Insurance products are subject to terms, conditions and exclusions not described in this blog. The policy contains the specific details of the coverages, terms, conditions and exclusions. 

The insurance products and services described in this blog are not offered in all states.  ERIE life insurance and annuity products are not available in New York.  ERIE Medicare supplement products are not available in the District of Columbia, New York and Wisconsin.  ERIE long term care products are not available in the District of Columbia and New York. 

Eligibility will be determined at the time of application based upon applicable underwriting guidelines and rules in effect at that time.

Your ERIE agent can offer you practical guidance and answer questions you may have before you buy.