Do Graduate Students Need Life Insurance?

Obtaining a graduate degree may be the right choice to increase your earning potential and advance your career. If you have decided to go to graduate school, life insurance may be the last thing on your mind. Nevertheless, it may be a smart move for a full-time or part-time graduate student.

Students in grad school tend to be older with more responsibilities than undergraduates. They may have spouses and children relying on them financially. There are several important reasons to consider purchasing life insurance while earning a graduate degree. Our friendly agent can help you find a policy to suit your needs.

You may need to quit your job or reduce your hours to return to school for a graduate degree. It could mean losing access to employee benefits, such as group life insurance. Purchasing an individual term life insurance policy can allow you to lock in a monthly rate and avoid a lapse in coverage due to the change in your employment.

If you are like many people, you may have student loan balances left from obtaining your bachelor’s degree. You may need more student loans when you enter graduate school. Generally, federal student loans are discharged when you die. With private student loans or a co-signer, however, your debt may be passed along to your loved ones. Life insurance could help them manage the costs.

After some years in the workforce, you may be married with children or have aging parents depending on you when attending graduate school. Although life insurance can never replace your contributions to your loved ones, it can help secure their future should something unexpected happen to you.

The younger you are when you purchase life insurance, the lower your rates will be. The two main factors affecting life insurance premiums are age and medical history. The older you become, the greater your chances of developing a health condition. Buying a policy now lets you lock in lower rates while you are younger and in better health.

Generally, whole life insurance is not the best choice if you have student loans. On federal repayment programs, you should do all you can to reduce your adjusted gross income to reduce student loan payments. Life insurance premiums are not tax-deductible, and rates are lower for term life insurance.

To determine the amount of life insurance to buy as a graduate student, consider your budget, debt balance, and student loan repayment timeline. Estimate how long you will have the debt and how much it will cost to pay it off. For example, if you expect to finish graduate school with $100,000 in student loan debt, purchase at least $100,000 in life insurance coverage. Shop for a term life insurance policy with a term as long as your student loan repayment period or longer.