Upgrading your education? Reap the rewards (and protect them, too).
A graduate degree can increase your earning potential, help you advance in your career, or even change your career path altogether. If you’re filling out applications, you’re probably concerned about GRE or GMAT scores, scoring a fellowship, or getting into your first choice school. Have children? There are other considerations, like choosing a new neighborhood with access to great schools.
But one task that probably isn’t on your grad student to-do list but should be: life insurance.
Why Do Graduate Students Need Life Insurance?
Let us count the ways.
1. You Have Student Loans
Chances are you graduated from undergrad with some student loan debt. Even if you didn’t, you might get student loans while in grad school. Here are some sobering stats, courtesy of Student Loan Hero:
- In 2012, 71% of students graduating from four-year colleges had student loan debt.
- The average Class of 2016 graduate has $37,172 in student loan debt.
- 40% of all student loan debt was used to finance graduate and professional degrees.
Depending on the type of loan 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 loan or a co-signer, these debts may be passed along — maybe even due immediately. Contact your servicer for the specific terms of your loans.
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 losing access to employer benefits like group life insurance.
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 rate than 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 much 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 take care of them for years to come.
What Kind of Life Insurance Should Grad Students Buy?
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, select a coverage amount, and make a monthly payment through the end of the term. Bestow offers affordable 2-year term life policies — a great option for anyone with short-term life insurance needs.
Before you hit the books, check life insurance from your to-do list. That’s just one less thing to worry about so you can focus on your studies (and that thesis or dissertation) instead.