4 Reasons Why College Students Need Life Insurance in 2020
With not a single care in the world, college students have very different priorities in life, and getting life insurance is not one of them. However, it’s essential to think about the future and make plans. Sometimes, life is full of unpredictable events.
Some people are under the impression that life insurance is a hoax. For them, accidents are unlikely events, and paying the premium is a financial burden. I want to share something with you, related to the subject. A couple of years ago, a 20-year-old boy from Mumbai, Dev, was coming back home from college. He was studying at Yale and was a stellar student. His parents were very proud of his achievements.
Everyone spoke highly of his academic prowess. But a tragedy struck. On his way back from college, he had a car accident and lost both his legs and his eyesight. Dev’s parents, Mr. And Mrs. Chouhan, had to face an awful time. They had to repay Dev’s student loan along with the medical bills. This tragedy took a huge financial toll on them. A couple of months later, Dev died. Mr. and Mrs. Chouhan was still in mourning when the bank gave them a notice for immediate repayment of the student loan. It was a very tragic time because financial commitments waited for no one and had no sympathy for the family.
Fortunately, people from all over the country rallied in their support and protested against the bank. Public support pressured the bank into giving Mr. and Mrs. Chouhan 3 years to repay the loan. Unfortunately, these tragedies happen in real life, and you need to be financially prepared to face such situations.
With insurance, Dev’s parents would not have to worry about paying back the medical bills. Furthermore, depending on the policy, they would most likely receive a payout for accidental death and dismemberment, giving them additional funds to cover for his student loan. They would have gotten 25% – 50% of the policy amount for accidental death.
We will now look at the reasons why college students need a life insurance policy
1. Dependent Parents
Many students have dependent parents who are old and need medical and financial help. A term life insurance policy takes care of the business needs of helpless parents. It also provides surplus money to take care of all the miscellaneous expenses as well as support the dependents.
The primary objective basis of the insurance market is to protect the compensation and cash assistance to victims of unforeseen extraordinary events. The idea of life insurance is to make sure that your dependents can provide for themselves even in your absence, as stated by Insurance Market. It’s no different for college students. While you might not have any children while you’re at school or straight out of college, you might have dependent parents, and that’s where insurance might help. If anything were to happen to you, they would then receive a lump-sum of money to assist them financially.
2. Student Loans
Every year, college students take student loans to receive education in the best possible institutions. Every year, many students go abroad for higher education. Student loans amount to nearly 1 million dollars every year. Many students mortgage their houses to receive student loans.
Sometimes, the bank sanctions the loan only when the students have a guardian or a surety to sign on their behalf. In situations of untimely demise or accident of the student, the guarantor needs to repay the loan. Sometimes the banks accelerate the loan repayment schedule after a sudden death or even ask for a full repayment as soon as possible.
Life insurance helps to repay the entire loan amount and reduces the financial pressure on the guardian of the deceased, taking this burden off the shoulders of the child’s parents or guardians.
3. Marriage at a young age
Apart from loans and debts, early marriage and having a child while still in college are significant reasons to buy term life insurance. More than one-third of all undergraduate students raise children while attending college. That makes it even more critical to have appropriate life insurance cover in place.
Marriage implies additional responsibilities. Therefore, it becomes necessary to get life insurance to provide for children as well as dependent spouses. Life insurance will take care of the family after an unfortunate incident of death or accident takes place. The insurance money will also provide for the educational and other needs of the children.
4. Protecting Family Finances
Several families do not take a student loan to finance their child’s education. Parents fund their children through their hard-earned money or the savings of a lifetime. Sometimes families max out their credit cards or mortgage their jewelry, houses, and other valuables. In the event of a sudden accident or death, the family falls apart ultimately. In such critical situations, they will need stable finances to fall back on. There is no replacement for the loss of a loved one, but one needs money to survive. In the face of such an unfortunate situation, the life insurance policy provides the much-needed financial help to repay the debts and build back the lost financial standing.
Planning for an unforeseen accident is morbid and disheartening, but it is a sad reality of life. You need to take charge of your future and the future of your loved ones. Don’t think any further and buy a term life insurance right away to help secure your financial future. Insurance is not a scam or a ploy that you do not need. If you are to emphasize your insurance policy, it means that something has happened to you, either illness or an accident that might leave you handicapped. The whole purpose of an insurance policy is so that you will not leave your family or yourself, riddled in debt.