Protect Your Clients from College Debt

Protect Your Clients from College Debt

If your clients’ children are looking at student loans, your clients should be looking life insurance.

Right now, deadlines are approaching for the Federal Application for Student Aid, and students may be looking at options to pay for college. While grants and scholarships are available, the ever-rising costs of tuition will likely force students to fund their education with loans as well. 

According to an article from the Wall Street Journal, 70 percent of the class of 2014 graduated with an average debt of $33,000 from federal, state and private loans. The longer they go to school, the longer it will take to pay it all back. According to an article from the Huffington Post, individuals with an associate's degree on average take 18.3 years to pay off their debt, compared with 19.7 years for those with a bachelor's degree and 23 years for those with a graduate degree.

Most parents of college-age kids are heading towards their retirement years and have financial obligations of their own. Before your clients cosign a student loan for their children, here are some questions to ask them: 

  • If you cosign a loan, did you know you are still responsible for your child’s debt if they are no long living?
  • How would you repay the debt?
  • Would you have to prolong your retirement or withdraw funds from your retirement account?
  • Did you know you could use life insurance to plan for this risk? 

Put it in Practice: It costs as little as $13 a month for $100,000 of coverage on an 18-year-old male for a 20-year term.* That coverage can not only secure your client’s financial future, but it can also protect their child’s future spouse and children. Ask if they can give up three cups of coffee a month for peace of mind. 

*Premium rates vary by a number of factors, including carrier, product client health and age, and a number of other factors.