Upgrading your education? Reap the rewards (and help protect them, too). A graduate degree can increase your earning potential, help you advance in your career, and even change your career path altogether.
If you’re filling out grad school applications, you’re probably concerned about GRE or GMAT scores, scoring a fellowship, or getting into your first choice graduate school. But one task that probably isn’t on your grad student to-do list (but might be a good idea to consider) is buying life insurance.
Why Do Graduate Students Need Life Insurance?
There are a lot of reasons that people in graduate school may want to consider life insurance as a student.
Graduate students tend to be older and responsible for more than undergrad students – perhaps even have people, like children or a spouse, counting on them financially. Especially if you’re leaving a job or going part-time to get back in school, it’s important to make sure you’ve got a plan in place for your loved ones. Here are a few more reasons why you might want to consider life insurance as a college student, especially if you are in grad school.
1. You Have Student Loans
Many students graduating from four-year colleges had student loan debt (if you didn’t graduate with debts, tell us your secrets). If you did manage to make it out debt free and with a bachelor’s degree, chances are you will need student loans while in grad school.
Depending on the type of student loans you have, there are a variety of ways these debts are handled should you pass away.
Generally, federal student loans are discharged, but if you have private student loans or a co-signer, these debts may be passed along to loved ones (contact your lender for the specific terms of your loans). A life insurance policy could help your loved ones manage those costs during a tough time.
2. You Don’t Have Access to Work Benefits
Quitting your job or reducing your hours to go back to school means a whole slew of changes – including possibly losing access to employer benefits like group life insurance coverage.
With COBRA, you can keep your former employer benefits for a limited period (18 to 36 months depending on your circumstances), but that only includes medical, dental, and vision plans. Life insurance is not considered medical care nor a disability benefit.
For most of us, once you leave your job, you lose your group life insurance. Some employer plans do allow you to keep it (usually converting it to a whole life policy). However, you’ll likely pay a much higher insurance premium than you would buying your own individual life insurance policy since you’re no longer part of the group plan.
Lock in a monthly rate on an individual term life insurance policy to avoid any lapses (or gaps) in coverage due to your employment situation. Plus, buying when you’re younger is less expensive than trying to buy a policy later in life.
3. You Have Dependents
If you’re going back to school after a few years in the workforce, you’re probably in a different stage in life. Maybe you’re married or have children, so enrolling in a graduate program is more than just extending the glory days of undergrad.
Long gone are the days of rolling out of bed and attending class in your pajamas (or not… we’re not judging).
Dependents can include your spouse, partner, children, aging parents – anyone who depends on you for assistance. Even if you’re a stay-at-home parent not bringing in any income, your physical presence counts, too. You contribute way more than you think: childcare, housekeeping, cooking, and chauffeuring are just a few examples.
Life insurance won’t replace you, but you can leave those who depend on you a financially supportive gift that can help take care of them should you pass away unexpectedly.
4. The Younger You Are, The Cheaper Your Life Insurance May Be
Enrolling in a life insurance policy at your health and wellness peak means that you could be paying the lowest premiums of your life. If you plan on getting a policy down the road, it makes sense to consider crossing it off your list early.
Term Life Insurance Rates for College Age Students and Beyond
| Age | Gender | $250,000 | $500,000 | $1,000,000 |
|---|---|---|---|---|
| 25 | Female | $10.79 | $15.62 | $25.42 |
| Male | $17.04 | $27.46 | $49.10 | |
| 30 | Female | $12.76 | $17.66 | $30.32 |
| Male | $18.07 | $29.09 | $53.18 | |
| 35 | Female | $15.21 | $22.97 | $40.93 |
| Male | $19.50 | $31.54 | $58.08 |
What Type Of Insurance Policy Should Grad Students Buy?
Just like car or health insurance coverage, there are different types of life insurance policies. While there’s no one-size-fits-all solution, term life insurance is an affordable option that is easy to understand, and a popular choice among financial gurus. Pick a term length, select a coverage amount, and make a monthly payment through the end of the term.
Whatever type of life insurance policy you pick, be sure to consider debts (like student loans or mortgages) and projected costs (perhaps a college fund for your kids) to make sure your policy meets your family’s specific needs.
Eligibility: Can Full-Time Students Get Life Insurance?
If you’re currently going to school full-time and are unemployed, getting life insurance coverage may be challenging. Every life insurance company has its own methods for approving or disapproving applicants. This doesn’t mean that you’re out of options, just that your options could be limited.
If you’ve been unemployed for just a short period of time, this likely will not impact your application. However, if you’ve never held a full-time job, consider explaining in your application that you’re a full-time graduate student. Their main worry is that you won’t have the means to pay your monthly premiums, and since graduate students are more likely than most to find employment, this should do the trick. Also, disclosing your assets on your application may help your case as well.
Finding The Right Life Insurance Policy For You
While finding the right life insurance policy can seem challenging whether you’re a college student or not, it doesn’t have to be.
With Bestow, you can apply for a term life policy online, no medical exam required. Just answer a few questions, hit submit, and that’s it — you just applied for life insurance (in mere minutes).
Start with a free quote and see just how affordable life insurance as a student can be (with Bestow, rates start from just $11 per month!).
Key Takeaways
- There are several reasons to consider life insurance as a college student, and graduate students tend to have more financial responsibilities than undergrad students.
- Grad students are more likely to have dependents than undergrad students — another reason to consider life insurance.
- If you were to pass away with student loan debt, your beneficiaries could use the life insurance payout to pay them off.
