If you're co-signing big student loans for your child, you may want to buy a life insurance policy while you're at it.
While no one wants to imagine the death of their child, taking out insurance on your son or daughter -- or asking them to purchase their own plan -- will protect you from being hit with mountains of debt should tragedy strike.
And the policies are pretty cheap. A basic plan with up to $250,000 in coverage can cost as little as $15 a month for a young, healthy college student or recent graduate. That's a whole lot less than the loan payments you could be stuck with -- which average more than $200 a month.
Such a move would have been life altering to Steve and Darnelle Mason, who lost their daughter Lisa five years ago.
Trying to pay back the $100,000 in private student loans they co-signed for their daughter has been a financial nightmare.
"I absolutely wish we had [a life insurance] policy," said Steve Mason. "We would not have struggled financially for the past four years with these private student loans, and our credit would not have been ruined."
Federal student loans are forgiven by the lender when a borrower dies, but private lenders aren't required to provide any such relief.
That's one reason it's important to get as much federal aid as possible before turning to private lenders. And for parents, it means not co-signing on a loan unless you have the means to repay it.
Another reason for caution: student loans can rarely be discharged in bankruptcy.
It's hard to imagine your daughter or son to pass away before you do. It's scary but it's reality. If you are struggling with your finances and need solutions. Atlantis Law is here to help you with a plan. We will put you in touch with of our trusted Attorneys who will devise a plan for you to succeed. Give us a