If you're young, healthy, and have no dependents, you might think that you don't need Life Insurance. However, if you have taken out private student loans you might buy a Life policy to repay this debt.
Although federal student loans allow a "death discharge" which releases the borrower's survivors and heirs from responsibility for the debt, private lenders generally require repayment by the borrower's estate. What's more, most private loans involve a co-signer who is legally obligated to pay this debt - and if the borrower is married, the surviving spouse could even be held responsible for it.
If you have student loans from a private lender, review your loan papers to determine the consequences for your family should you die before the debt has been repaid. You can protect your co-signer(s) and/or spouse by making them the beneficiary of a Life policy that covers the loan debt. Students under age 40 who need less than $500,000 in coverage can apply for Term Life Insurance. If you have your parents as co-signers, and decide later that you want to protect your spouse, you can just change the name of the beneficiary.
A small Life Insurance premium can be well worth the extra peace of mind for your co-signer(s) or spouse.
There's no cut and dried answer on using Life Insurance to repay private student loans. Our agency's specialists are always ready to offer their professional advice based on your individual situation.