Life insurance? Aren’t you too young to even worry about that right now? After all, how many university students die each year?
While it’s true that dying is a rarity among people in their late teens and early 20s, having a life insurance policy – at least a small one – is something that you may need to think about. It’s not that there’s a high likelihood that it will ever be needed, but more that if it is, you could be leaving your family in a difficult position.
Think about some of the expenses that your family may face in the event of your death.
Final ExpensesEven if there were no other need for life insurance, there will still be final expenses to cover. This can include the obvious expense of burial costs, but there may also be lingering health care costs that need to be paid. Having a life insurance policy will ensure that your family – who have most likely been helping to pay your way through university – will not be on the hook for these expenses in the event of your death.
Cleaning Up Your Debts
In addition to lingering medical expenses, you may have other debts or obligations that your family will face upon your death. These can include unpaid bills, credit card balances, and even some debt connected with your education, either directly or indirectly.
You should aim to have a life insurance policy that will be sufficient to at least payoff any obligations that you may be leaving behind. Even if your family is not required to payoff certain debt obligations, they may do it anyway due to emotional concerns. For example, it may just be their practice to payoff any obligations are owed by your family. They may feel an even greater obligation to pay any debts that are connected with you, seeing them as part of your “legacy” in the world.
Life insurance would enable them to handle it anyway they see fit.
An Emotional Cushion for Your Loved Ones
When we talk about life insurance, there is one area that gets very little attention, but can be the single best reason for having coverage in the first place.
If you were to die, your family would be emotionally distraught. There could be a need for extensive counseling and medication. There can even be lost wages as a result of time lost from work due to the emotional fallout of your loss. Parents have even been known to lose their careers, being unable to overcome the grief of losing a child.
Related: How Much Life Insurance Do You Need?
A life insurance policy can provide a financial bridge that will help them to deal with your loss. It will provide extra funds to pay for out-of-pocket expenses, as well as a cushion to cover lost wages.
Knowing That You Won’t Leave Your Family in a Financial Ditch
Of the biggest reasons why anyone has life insurance is so that we will not leave our loved ones in financial distress. Even if you don’t have many financial obligations in a direct sense, your loss could create new ones for your family. A life insurance policy would ensure that there’s money available to avoid this outcome.
You can live your life with a greater sense of peace knowing that your family will have the financial resources that they need in the event of your death. The last thing any of us should want to do is to leave the people who have been taking care of us all our lives in a bad financial position.
The Cost-to-Benefit Ratio is Unbeatable
One of the very best reasons to have life insurance is the cost factor. The benefit the life insurance policy will provide can be hundreds of times greater than the annual cost to have it. This is especially true since you are young and healthy.
You may be able to purchase a $50,000 term life insurance policy for just a couple of hundred dollars per year. That may add upwards of $1,000 to the cost of your education over a period of four years, but the $50,000 benefit provided to your family in the event of your death would be enormous.
Sure, money’s tight, but try to find some extra to take at least a small term life insurance policy so that your family will be covered in the event of your death. You’ll have a clear head about it, and your family will be provided for in the event that the worst happens.
As a university student, have you ever given much thought to having life insurance?