Congratulations on your graduation, and welcome to the world of adulthood! That’s right, the second you move out of your dorm room and into the real world, it begins. There are bills to pay and jobs to find. Don’t get too scared; the real world will cut you some slack for a few years, but it’s time to start learning about responsibility the easy way before you have to learn about it the hard way. Take time to think about those who love you, and start with life insurance.
As a recent college grad, you may or may not have dependants who need you to support them. You may or may not have a job, and you might even be on unemployment. But one thing is likely—you have student loans. They might be private loans, federal loans, or even loans that your parents have made to you. But no matter what kind of loans you have or the payment plan you’re going to set up, you need to think about what would happen if you passed away before you could pay your lenders back.
One of the lessons of reality is that money owed doesn’t just go away when you die. Someone is responsible for paying it, and in your case, that someone might be your parents. If you want to ensure that your parents won’t get stuck with a large student loan bill after you pass away, you can take out a life insurance policy to protect them.
Life insurance pays a benefit to the person listed on your policy. There are many kinds of life insurance, and you can choose the amount of life insurance coverage you want. To begin with, you should determine whether you want term or whole life. According to MSN money, if you’re looking to keep a policy for only a set limit of years—say 10 years so that you can get out from under your student loan debt—then you should probably choose term life insurance, which covers you only for a certain term. If you want life insurance that lasts over 20 years or for your whole life, MSN Money suggests that whole life is a better option. However, this option is also more expensive.
To determine what kind of life insurance is best for you, you can use tools like MSN Money’s Life Insurance Needs Estimator. You can also consider why you want the life insurance policy and who your beneficiary will be. For instance, you need to decide if you’re hoping to use the life insurance policy as an investment or as a way to donate to a charitable organization. You also need to consider what you can afford. As a recent college grad who will likely be dealing with the IRS for the first time this year, you might want to wait to upgrade your life insurance until after you know for sure what you can pay.
But as a recent college graduate, you should have life insurance. Don’t let others get stuck with your student loan debt when you pass away. And as your parents age, prove to them that you can care for them by finding their senior care in your will with money you’ve obtained from a life insurance policy. Now that you’re out of college, you have to ease into the real world. But having life insurance is one of the first of many responsible choices.
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