College Confidential - View Single Post

jym626 · 03-19-2005, 05:46 PM

Bluebayou said it most eloquently, and Calmom is also correct. If you are 18 and have debt in your name, it is no one elses responsibility to pay it off unless they are a co-signatory on a loan. One of our local financial gurus describes life insurance as essentially an income replacement. If you have no income, there is nothing to replace. I also found this on the Illinois state insurance website:

"The goal of life insurance is to provide a measure of financial security for your family or loved ones after you die. If you are a young college student with no dependents, life insurance is not as important as it will be when you get older and are married and/or have children. For most college students, the only reason to buy life insurance is to cover funeral expenses and debts, if there are any. Your parents may already have a life insurance policy on you that will cover these expenses. "

If you don't have a lot of liquid assets, but are willing to set aside $25/mo for insurance, I'd recommend you put it instead in savings for the short term, in a decent interest-bearing savings account (feel free to PM me and I'll tell you about a great savings program- and no, I am not an agent or in the business, but it is very good, and everyone in the family, including grandparents and kids are doing it). Then, when you feel you have enough to invest, put it in a no-load mutual fund or something. They are pretty low-risk. If you are comfortable, try the stock market. Learning to save and invest is a very important skill for college kids.

I used to be a big proponent of insurance, and we do have plenty at this point in our lives, but it is to protect assets. There is really little need for life insurance when you really don't have any assets to protect. Term insurance is not an investment- it is a gamble. They (the insu. companies) are betting that you won't die, and you are betting that you will. That's why for HS/college aged kids, auto insurance premiums are high and life insurance premiums are low. If you have some medical condition that will affect your ability to buy life insurance later, then you might want to buy a term policy that won't require a health exam. Other than that, there are much better ways to invest $ at a younger age.

Addendum: As for AD & D policies, even AAA offers that for next to nothing or possibly nothing, as part of their roadside coverage.

03-19-2005, 05:46 PM	#8
jym626 Senior Member Join Date: Oct 2004 Posts: 12,934	Bluebayou said it most eloquently, and Calmom is also correct. If you are 18 and have debt in your name, it is no one elses responsibility to pay it off unless they are a co-signatory on a loan. One of our local financial gurus describes life insurance as essentially an income replacement. If you have no income, there is nothing to replace. I also found this on the Illinois state insurance website: "The goal of life insurance is to provide a measure of financial security for your family or loved ones after you die. If you are a young college student with no dependents, life insurance is not as important as it will be when you get older and are married and/or have children. For most college students, the only reason to buy life insurance is to cover funeral expenses and debts, if there are any. Your parents may already have a life insurance policy on you that will cover these expenses. " If you don't have a lot of liquid assets, but are willing to set aside $25/mo for insurance, I'd recommend you put it instead in savings for the short term, in a decent interest-bearing savings account (feel free to PM me and I'll tell you about a great savings program- and no, I am not an agent or in the business, but it is very good, and everyone in the family, including grandparents and kids are doing it). Then, when you feel you have enough to invest, put it in a no-load mutual fund or something. They are pretty low-risk. If you are comfortable, try the stock market. Learning to save and invest is a very important skill for college kids. I used to be a big proponent of insurance, and we do have plenty at this point in our lives, but it is to protect assets. There is really little need for life insurance when you really don't have any assets to protect. Term insurance is not an investment- it is a gamble. They (the insu. companies) are betting that you won't die, and you are betting that you will. That's why for HS/college aged kids, auto insurance premiums are high and life insurance premiums are low. If you have some medical condition that will affect your ability to buy life insurance later, then you might want to buy a term policy that won't require a health exam. Other than that, there are much better ways to invest $ at a younger age. Addendum: As for AD & D policies, even AAA offers that for next to nothing or possibly nothing, as part of their roadside coverage.
	Reply