Most students graduating from college feel like they have their whole life ahead of them, and the last thing they want to think about is buying a life insurance policy. They might think there is plenty of time to do so and place life insurance under the heading of something to buy at some later (unspecified) date. However, there are many reasons why college graduates should consider purchasing a life insurance policy.
What Types of Life Insurance policies are Available?
When it comes to life insurance, there are two different types of policies available. A term life policy is one that is put into place for a specific amount of time. Although the premiums are typically lower than those of a whole life policy, there is no cash-out advantage; it is only payable upon the death of the policy holder. A whole-life policy is one that covers the purchaser through their entire lifetime, and offers the advantage of providing cash for unexpected emergencies. In addition, a whole life policy will typically cover such things as funeral expenses and a lump sum payment to the beneficiaries. Which policy is the right one for a college graduate depends on what their individual circumstances are.
Why is Life Insurance Necessary?
There are myriad reasons why purchasing a life insurance policy upon graduating from college should be considered a necessity.
- College graduates who are already married and have (or are planning on having) children need to have a policy in place that will take care of their loved ones if they die unexpectedly.
- Life insurance premiums are usually much less expensive for college graduates than for older people, as there are not usually health issues to deal with or medical concerns.
- For those college graduates who had parents co-sign on student loans, a life insurance policy will help protect them from being responsible for the loan payments after a death.
- Life insurance policies offer the benefit of peace of mind in uncertain times.
- Although the premiums for life insurance policies are not tax deductible, there are usually no taxes or penalties for survivors in the event of the policy holder’s death.
Is Life Insurance Expensive?
Although the actual premium amounts of life insurance policy vary depending on the type of policy purchased as well as the age and health of the policy holder, most life insurance can be purchased at a very reasonable rate. Many people hear the word “insurance” and automatically cringe, thinking it will cost an arm and a leg. However, in comparison to other monthly expenses, it is really quite easy to come up with the amount of the premiums. Typically the premiums will range between the price of four gourmet coffee drinks and a tank of gas. When put in that perspective, it is easy to see how purchasing life insurance is an attainable goal for any college graduate.
No one likes to contemplate their eventual death, especially as they graduate from college and have their whole life ahead of them. However, in order to provide loved ones with financial security and protection in the event of a death, a life insurance policy is a necessity for college graduates.