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life insurance for your college kids?
Old 09-17-2018, 08:49 AM   #1
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life insurance for your college kids?

How many folks have their kids take out life insurance after college?

I am thinking of the exposure the parents have if they had to co-sign student loans. If something happens to the son/daughter then the parents could get hit with a sizable debt which could derail their retirement plans.

Also, if the adult child has their own LI policy, does the entire proceeds go to the beneficiaries ... or does their loan debt get automatically paid off first ??
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Old 09-17-2018, 02:14 PM   #2
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Life insurance proceeds go to the beneficiaries.
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Old 09-17-2018, 02:46 PM   #3
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Originally Posted by albireo13 View Post
How many folks have their kids take out life insurance after college?

I am thinking of the exposure the parents have if they had to co-sign student loans. If something happens to the son/daughter then the parents could get hit with a sizable debt which could derail their retirement plans.
Depends on the specifics of the loan:
https://studentloanhero.com/featured...-when-you-die/

As always, if your demise would cause significant financial harm to someone else, then you should have insurance to mitigate that risk.

If you fall into that category, don't wait until after your child finishes college. And in general, don't co-sign loans.
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Old 09-17-2018, 02:51 PM   #4
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isn't this an insurable interest issue?
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Old 09-17-2018, 03:06 PM   #5
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Our kids have no debts and no financial obligations, so they don't need life insurance. I have strongly told them not to buy any life insurance from anyone without talking to me. College graduates usually get hit up by "friends" who could not find jobs except as insurance sales reps. I told them especially to avoid buying anything from such perps.
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Old 09-17-2018, 03:21 PM   #6
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isn't this an insurable interest issue?
I don't think so.... I think that the OP is just asking if one should carry life insurance on their young adult children.

The answer is that if the death of your your young adult would cause you a financial burden.... for example, if you co-signed their college loans and would be responsible for paying them off and don't have enough money to do that or it would cause you a burden financially.

I never carried life insurance on our young adult children but there are some situations where it would be prudent to do so.... plus term insurance on people that age is dirt cheap.
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Old 09-17-2018, 04:34 PM   #7
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I have read that many student loans are discharged on the death of the borrower. I don't know if that is still true if there is a co-borrower or co-signer.
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Old 09-17-2018, 04:41 PM   #8
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I have read that many student loans are discharged on the death of the borrower.
That depends on the type of loan.

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I don't know if that is still true if there is a co-borrower or co-signer.
In most cases, the co-signer is still on the hook.
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Old 09-17-2018, 04:47 PM   #9
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I don't think so.... I think that the OP is just asking if one should carry life insurance on their young adult children.

The answer is that if the death of your your young adult would cause you a financial burden.... for example, if you co-signed their college loans and would be responsible for paying them off and don't have enough money to do that or it would cause you a burden financially.

I never carried life insurance on our young adult children but there are some situations where it would be prudent to do so.... plus term insurance on people that age is dirt cheap.
I'd probably do it if I financed their graduate school education.

I have one who is still considering medical school after they fulfill their active duty service obligation.

They didn't qualify for one of the very few medical school slots direct after graduation.
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Old 09-17-2018, 06:34 PM   #10
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My DIL cosigned my granddaughter's college loan, she has life insurance on GD. Especially now that GD is into rock climbing and mountain repelling...….
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Old 09-17-2018, 07:08 PM   #11
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My DIL cosigned my granddaughter's college loan, she has life insurance on GD. Especially now that GD is into rock climbing and mountain repelling...Ö.


Wow, that grand-daughter must be formidable if she can repel a mountain!

Ha
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Old 09-17-2018, 07:24 PM   #12
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For us, no. Paid for college outright, and did not/ will not co-sign for any loans with them.

I did get after my son to take out life insurance for the benefit of his stay-at-home wife, and baby daughter.
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Old 09-17-2018, 07:25 PM   #13
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oops - I meant mountain rappelling! She has hired with a company that sounds like a Dr. Phil boot camp. She takes troubled kids out for four days at a time, hiking, climbing, rappelling, camping. Proud of her, but I do worry...….I'm grandma, that's my job....
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Old 09-17-2018, 10:31 PM   #14
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My parents signed me up for a 5K life ins policy when I was a baby.... I never heard them talking about how they could cash in on it.

Seriously, never cosign a loan.
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Old 09-18-2018, 01:30 AM   #15
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oops - I meant mountain rappelling! She has hired with a company that sounds like a Dr. Phil boot camp. She takes troubled kids out for four days at a time, hiking, climbing, rappelling, camping. Proud of her, but I do worry...….I'm grandma, that's my job....
You should probably check the terms of the life insurance policy - it may be void for risky/dangerous occupations such as this. I know many forbid skydiving, being a pilot or flying as a hobby, and the like.

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Top 10 most common reasons for life insurance exclusions and loadings include:
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6. Dangerous occupation
If you work in a high-risk profession, for example, in construction, or your job opens you up to specific hazards, like car accidents for taxi drivers, your policy may have an exclusion for claims related to these occupational risks.
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9. Hazardous hobbies
Some extreme sports and activities are considered particularly dangerous and may be excluded, such as bungee jumping, mountain climbing, and skydiving. However, select insurers do provide coverage for dangerous past-times by opting to apply a premium loading.
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Old 09-18-2018, 05:29 AM   #16
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Seriously, never cosign a loan.



Easier said than done. Aside from federal student loans, virtually any private student loan will want a co-signer.


We have 5 kids so, funding all of their college costs is out of the question for us. They have gotten virtually no aid to speak of. For 3 of the kids, their total financial aid through college was federal Stafford loans which amounted to < $2K/yr.
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Old 09-18-2018, 05:46 AM   #17
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The obsession over life insurance I just canít comprehend.
Not for me or for my kids ever. I have a non working stay at home wife and 3 small kids.
Try selling it to me, no pitch is good enough
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Old 09-18-2018, 05:57 AM   #18
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Easier said than done. Aside from federal student loans, virtually any private student loan will want a co-signer.


We have 5 kids so, funding all of their college costs is out of the question for us. They have gotten virtually no aid to speak of. For 3 of the kids, their total financial aid through college was federal Stafford loans which amounted to < $2K/yr.
Not sure what your point is. Does this mean you are paying directly out of your savings, are the kids finding/earning most of the money, or what? I would have assumed you could have got loans if you tried.

OP - I think you have good advice. If paying off the loans you co-signed would harm you, then you likely should buy life insurance on the kids. Note this does not protect if you kids just don't pay the loans. I would get some agreement with the kids about how they are going to pay the loans. This should have been done before getting the loans. You may want to look at both term and whole life insurance. There are risks / rewards to each type.

Your risk is not just that the kids might not live long enough to pay the loan. They may run into problems and not pay the loan for a number of reasons that may not trigger a life insurance payment.

Just remember that you should be prepared to pay any loan you co-sign. The lender required a co-signer because the borrower did not have the credit.. you are the deep pockets.
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Old 09-18-2018, 02:16 PM   #19
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The obsession over life insurance I just canít comprehend.
Not for me or for my kids ever. I have a non working stay at home wife and 3 small kids.
Try selling it to me, no pitch is good enough
Unless you are financially well off, as the sole income earner in the family, being quite young at 34, should you unexpectedly pass away, that would leave quite a financial burden on your stay at home wife with 3 small kids to raise - don't you think?

For someone your age, you could pick up a $500,000 30-year term policy for about $400/year. That's an extremely small price to pay to protect your loved ones should something unexpected happen to you during your peak earning years - don't you think?

I'm not trying to sell it to you. I'm simply suggesting you consider what would happen to your family should you pass away sooner than expected?

To each his own.
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Old 09-18-2018, 02:27 PM   #20
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The obsession over life insurance I just can’t comprehend.
Not for me or for my kids ever. I have a non working stay at home wife and 3 small kids.
Try selling it to me, no pitch is good enough
So Beer-man.... if you get run over and killed by a beer truck tomorrow.... how will your non-working SAH wife and 3 small kids eat and pay the mortgage?

Think it through before answering.
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