How Can You Utilise An Insurance Policy To Help Your Child Pay For College?
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Life insurance plans are one of the few investment options capable of preserving your wealth over a long period. Meaning, if you can have a life insurance plan early, you can preserve your savings from both inflation and taxes for a long time.
When Does a College Student Need Life Insurance?
Contrary to a popular belief that buying life insurance as a college student makes no sense, there are many situations in which life insurance can surely help you, even in college.
1. If you have a Student Loan
Student loans, popular as Education Loans in India are the loans that you as a student can take, usually along with a co-applicant to fund your higher education. The interest rates of student loans are lower than regular ‘Personal’ loans. What if you die in between your education and there is still a major chunk of loan left to be paid? Your co-applicant will be left with all the burden.
But if you have taken a life insurance policy, the sum assured can be used to pay all the loans and debts you had.
2. If you have Dependents
Many decide to get married, while they are still pursuing their higher education. Also, some start their higher education a little late as well. If you fall in any of the above categories, then you should consider a life insurance policy.
It will take care of your spouse as the amount received can be used for paying off funeral and other one-time costs. If you have a child, he can use the money to pay for his education as well.
3. To Protect your Parents
Our parents do all the hard work and make sure that we get to live a comfortable and stress-free life. As we grow up, it becomes our responsibility to take care of them. But what if you die unexpectedly and are not able to take care of them.
When should a College Student Buy a Life Insurance?
Now that you know the importance of having life insurance even from an early age. Here’s how you can purchase a policy for yourself.
1. Use your Stipend Money
A college is a great place, often to spend money. However, if you are also trying to earn while you learn, you can use some of these earnings as savings.
2. Safekeeping Financial Gifts
There can be times when a relative of yours can give you a sum of money as a present. Money can be received from grandparents or other relatives. If you have received a considerable sum from them or even your parents during your college, you will certainly look to make use of this money. You need to find an investment that will keep your money safe.
Conclusion
Buying a life insurance plan such as a term plan or savings plan will not only keep your money safe but also build your habit of saving and investing from a young age. A life insurance policy will provide your parents with a sum assured, that they can use it to take care of themselves. It can also be used to pay the loans that they took for your education.
Also read- Importance And Benefits Of Life Insurance
