There are education loans or students loan provided by federal as well as private banks. Loans offered by federal banks are subsidized while the private banks don’t offer any subsidy on the loans they provide. While reading, this may seem a small difference, but this isn’t that small. As the loans installment continues for more than 10 or 15 years, this small subsidy amount can create a bigger difference in the longer term.
Another thing to be noted is the waiver of the loan. Under the student loans provided by federal banks, the debt is waived off if the student passes away before repaying the debt completely. But this isn’t the case if the student has got a loan from any private bank. The parents or the person who had signed as co-nominee is liable to pay the pending debt. At times, this is a very frustrating experience. Losing a loved one is a disturbing incident in itself and the additional burden of paying the debts can worsen the situation. This is where a life insurance plan can help, and you can get in touch with an insurance expert to receive life insurance policy details for the same.
In the US, there is a large number of students who get married while they are in college. This means they start living together in a separate home and their expenses increase significantly. Along with their educational expenses, such people have to take care of the loan installments as well. Moreover, they have their own household expenses to take care of and are quite tight-fisted with their monthly budget. If one of the spouses passes away, the situation may be quite difficult for the surviving spouse. Taking care of both the personal expenses as well as the pending debt can lend them to a situation of the financial bind and they might not be able to live a normal lifestyle after that.
At times, you are the only child of your parents and your parents are dependent on you for the expenses after retirement. A large number of people aren’t employed in a federal organization and hence don’t get a pension after their retirement. Such parents have no other option than relying on the income of their kids. If you are a kid of such parents, you can understand the situation better. After marriage, you will be supposed to take care both your own and your parents’ expenses. If the insured passes away before repaying the loan completely, these parents become responsible for repaying the same and this can be very tough for those parents. Such parents already don’t have a consistent source of income and are already grieving the loss of their beloved child. In the case, the stress of paying a heavy loan amount can make the situation worse. At times parents go through an emotional breakdown and take much time to recover. The worse thing about these loans is that if the parents aren’t able to repay the same, banks have the legal right to attach their assets.
Even if you are a child born very late, your parents will retire before you complete your studies and you would have to take care of your educational expenses as well. At the same time, you will have to look for sort of an employment so that you can take care of household expenses as well. If you parents have taken a home loan and the mortgage is still going; you are supposed to take care of those mortgage premiums as well. And if a student passes away in such cases, this can be a heart-breaking situation for parents. Hence, it becomes crucial to a cheap life insurance for students that will take care of the loan and other essential expenses if the unpredictable happens.