Got a loan to go to law school! Should I get a life insurance policy on the loan to protect my family?
Dear Cheryl&Mack,
I’ve been accepted to law school.
I’m working on getting a loan to pay for it, but I realized that if something happens to me, I don’t want my parents or my boyfriend to have to deal with paying it back.
What type of life insurance would be most appropriate for someone who needs a loan for a short period, having minimal existing debt, and no dependents, to ensure my family isn’t left with this debt?
Signed,
Aspiring Lawyer
Dear Aspiring Lawyer,
Congratulations on your acceptance to law school! Very exciting, and you should be so proud of all your hard work.
Now, let's talk life insurance - the responsible yet necessary expense to your academic adventure.
Given your situation; short-term loan, minimal debt, and no dependents – a term life insurance policy might be a good choice.
However, depending on how much you owe on your loan, I would also recommend looking at a 20-pay Whole Life Insurance policy.
This type of policy is lifelong coverage that pays your beneficiary, the person or people you chose to get your death benefit should you pass, a tax-free payment when you die.
Your policy is guaranteed to grow in cash value as long as you pay your monthly premiums.
Cash value is the value of the insurance policy that you can access as cash. You can always check your cash value online.
Your insurance payout is reduced when you access your cash value.
This allows for your money to grow as you are in school!
I hope this helps!