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The author is not pictured.
I count myself lucky. I had the good fortune of being able to go to art school and follow my dreams, where I learned about everything from writing compelling fiction to moving audiences with film, and I was taught by some truly stellar teachers.
Unfortunately, I did not have anyone to pay my way, qualify for any scholarships, nor receive any financial aid. So my tuition was paid for entirely by student loans, most of them private. My parents had to be cosigners in order to even qualify.
By the time I finished my bachelor's degree, I was nearly $100,000 in debt. I soon realized exactly how much of a burden that would be to pay off. But it wasn't just my future on the line. If I wasn't able to pay down the loans, the bill collectors would come knocking on my parents' door. Even if something catastrophic happened to me - including death.
That's why I've had a life insurance policy since I was 18 years old. Before I even finished my degree and accrued all that debt, my parents took out a policy large enough to cover my private student loans if something happened to me. (Federal student loans are canceled if the borrower dies before the loans are paid off, even if the borrower had a cosigner.)
Getting life insurance early has its benefits
As I later learned, life insurance is something people usually don't worry about until they get older, get married, or have a family. It's a great way to make sure your loved ones can keep a roof over their heads if something terrible happens to you. But in my case, the life insurance policy was just to prevent my parents from having to pay off my debt until the end of their lives.
There are some perks to getting life insurance at such a young age, however. For starters, it's less risky for insurance providers to offer a policy on a teenager's life. Since teens aren't going to die from old age any time soon (barring unforeseen tragedy), the insurance providers can collect premium payments for decades before they ever have to worry about paying out a death benefit, making this a pretty safe financial investment on their part. As a result of all of that, the premiums were a lot lower than they would have been if I waited until my 40s or 50s to get a policy.
By getting a life insurance policy at such a young age, I also got covered before any disqualifying or high-risk life events could occur. Similar to health insurance before the ACA was passed, life insurance providers are very careful about not providing coverage to people with pre-existing conditions. I even had to take a blood test to prove I was in good health!
It's just a fact of life that health problems are bound to occur the older we get and the more time we spend on this earth. If I were to get diagnosed with cancer and then try to get a life insurance policy, I'd either be outright denied or have to pay exorbitant premiums. But since I got insured before anything bad happened, health-wise, they can't cancel my coverage or raise my premiums if I do develop a health issue.
My policy has a term limit
My life insurance policy won't last forever. However, it's all but guaranteed to cover the full term of my student loans. While shopping for life insurance plans, we were cognizant of the fact that I could be paying off my student loans for up to 25 years. We took out a 30-year term life insurance policy instead of whole life insurance to save money on the premium.
I have been making a lot of headway on my student loan balance, but the amount of life insurance that would be paid out in the event of a tragedy isn't changing. So not only would this cover the remainder of my loan, it could leave behind a nice nest egg.
Eventually, I'll be able to remove my parents as co-signers from the loan so they won't be liable for my debt if I die before it is paid off. Should I get married, my husband would not be liable either.
With me as the sole borrower, it may be possible to get the loan discharged entirely in the event of my death. However, there is always the risk that my "estate" could be on the hook to pay it off, taking a bite out of any savings or assets I might otherwise leave behind for my loved ones. The life insurance policy will protect their inheritance as well.
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