Life Insurance for College Students
By USInsurance.com
The life of a college student is exciting with new experiences and new things being learned every day. It is one time in a young person’s life that, besides the actual studying and gaining of a degree to set one up for the future, should be a fun and enjoyable learning curve.
Life insurance and the purchase of such a policy is probably one of the furthest things from a young students mind. All young people think that they are invincible and that nothing will ever happen to them but, unfortunately, this is far from reality. The fact is that everyone should have a life insurance policy and purchasing such a plan like a term life policy when one is young is always a good idea.
Through this policy, a set amount of money is paid to an insurance company on a monthly basis for the cover, is usually signed for a period of up to 30 years (the term). No interest accrues and at the end of the term no money is paid back to the insured person. It is to be noted that the longer the term, the lower the monthly payment will be. The reason anybody young would buy such life insurance would be for a case of accidental death, whereby the policy would pay out for funeral expenses and any outstanding loans or bills which would still need to be paid after death.
Another life insurance option for students is a whole life insurance policy, where a fixed amount is paid each month to the insurance company which, in turn, manages the account on behalf of the policy holder. The value of this type of life insurance policy is that, over time and as the fund increases, you are able to take loans and withdraw certain amounts, both tax-free. Some of these policies even pay dividends to the policy holder and, let’s face it, getting a cash bonus every now and then is always welcome.
A universal variable life insurance policy is probably the only other form of life insurance suitable for a student. With this type of policy the monthly payments are invested in a mutual fund account and, depending upon how the fund does on the economic markets over a period of time, the payout may be much larger than the initial commitment; but the insurance company will not make any promises in this regard. As with the whole life insurance, withdrawals and loans are permitted under a universal variable life insurance policy.
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