When you’re young and relatively healthy, life insurance is probably the last thing on your mind. But if you’ve ever taken out a loan and had a co-signer, then it’s something you should put high on your list of things to acquire.
Student loan debt is not something that is wiped out in the event of death. Some private loans require that the remaining amount be paid in full, while others allow the co-signer to resume payments as usual, but nearly all require that the amount be paid in full.
It’s important to revisit your master promissory note and re-read the terms of the arrangement so that you and your co-signer are fully aware of what is expected of him or her.
To protect the loved one who is co-indebted to the lender with you, research coverage options that best match your current debtload – including car notes, property owned, and other long-term pieces of debt like student loans and find a policy that works for you. Most singles with no dependents need far less than $500,000. Insurers like MetLife offer policies that cost no more than $10 a month, an easy expense to add to the monthly budget, and one that will keep your co-signer out of debt.
For more on why life insurance is important in the grand scheme of student loans, head over to Bankrate.