Student debt is incredibly prevalent in our society today. This debt, when owed to a private lender, does not simply go away.
Term insurance is not intended to act as permanent coverage, lowering the risk for insurance companies. Additionally, term insurance doesn’t build cash value, which results in a lower premium. Because of its affordability, term insurance pairs nicely with debt protection. If you have term insurance, you may not need to take on another large expense as you work to pay off your outstanding student loan balance.
Term life insurance also has some flexibility. Once coverage is in force, it can be decreased over time. As an individual pays down their debt, they can also lower the face amount on their term policy, reducing their premium cost.
However, remember the premium on a term policy is level. Before reducing policy coverage, consider reviewing new life stages, such as: a growing family, a home purchase or even starting a business. These could warrant maintaining the current coverage level – or possibly warrant a need for permanent coverage.
Term insurance may offer the opportunity for conversion. Converting term insurance to permanent coverage does not require underwriting, so it can be a cost-effective way to utilize the policy you already have.
Contact Keyser to further discuss the important relationship between your student loans and life insurance. Find an agent’s email address here or call 877.381.3570.