Author Topic: life insurance on your kids with loans?  (Read 435 times)

albireo13

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life insurance on your kids with loans?
« on: April 19, 2017, 04:58:14 PM »
We have a few kids with significant Federal and private student loan debt.  Since we are co-signers on most of these, the Feds can come after us if something happens to them.  The worst thing I can think of is to lose a son or daughter and have the Fed at the same time hounding you to pay off their student loans!
I think this is just wrong but ... that's another discussion.

  With significant student debt out there, I feel we are exposed.  If we retire and something bad happens, we could be in real trouble.

Does anyone else think of this? 



SimpleCycle

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Re: life insurance on your kids with loans?
« Reply #1 on: April 19, 2017, 08:58:57 PM »
Federal student loans are canceled upon the death of the student, but federal student loans also don't usually require a cosigner.  So I wouldn't expect to be on the hook for those loans.

The private student debt doesn't have the same protections, and it would not be crazy to take out a policy that covered that debt.  You can also see if you can be removed as cosigner once they have stable income, but most private lenders deny removing cosigners.

solon

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Re: life insurance on your kids with loans?
« Reply #2 on: April 20, 2017, 10:33:15 AM »
Better yet, make extra payments on the loans for your kids. It will be a great gift to them, and it will eliminate the need for insurance.

Proud Foot

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Re: life insurance on your kids with loans?
« Reply #3 on: April 20, 2017, 12:53:51 PM »
What was your agreement with the kids when you co-signed the loans?  If you want them to be fully responsible for repaying the loans then you could do term life insurance on the kids or you could have them refinance without you on the loans.  If they have steady income they could probably get a better rate if they were to refinance.