When College Returns to Haunt Parents
No parent wants to contemplate the possibility of the sudden and unexpected death of his or her child. Unfortunately, failure to plan for this scenario can leave parents in a difficult financial situation that increases the hardship of facing such a tragedy. A child’s death is tragic regardless of the age at which it occurs. When the child is a young adult, however, the death can cause unique difficulties for the child’s parents and the young adult’s own family, if he or she started a family before his or her death. The young adult’s own family may be left struggling to pay the mortgage and other household expenses along with burial and/or funeral costs. These expenses must be handled even though the young family has lost the earning power of the deceased parent. When a child dies and he or she does not have his or her own family, the child’s birth family will likely be left paying for the child’s death-related expenses.
If the child is a college graduate who has taken out private student loans with the assistance of his or her parents, the child’s death can also result in the parents being held responsible for paying the balance of the remaining student loans.
The Solution? An Appropriate Amount of Life Insurance
Parents (and responsible children) who want to avoid the unpleasant and the potentially devastating prospect of having to pay back a private student loan for which they cosigned should encourage the child to obtain an appropriate life insurance policy. When shopping for a life insurance policy, individuals are encouraged to take inventory of their debts and obligations that must be met in the event the insured dies. Most people consider living expenses, mortgages, and car payments, but student loan obligations can easily be forgotten. If the child does not consider his or her student loan obligations, he or she can end up purchasing a life insurance policy with an insufficient cash benefit.
When your college graduate shops for his or her first life insurance policy, therefore, encourage him or her to take into account the amount of outstanding private student loans in determining the appropriate cash benefit. You should also confirm that your child takes into account any interest and other fees that might accrue on the loan between the time the policy is purchased and the time the cash benefit is needed. For instance, a $10,000 student loan may end up having a payoff amount that is greater than $10,000 at the time of the child’s death if the loan is deferred or if there are penalties imposed for late payments.
You can reach Miami Insurance Claims Lawyer J.P. Gonzalez-Sirgo by dialing his direct number at (786) 272-5841, calling the main office at (305) 461-1095, or Toll Free at 1 (866) 71-CLAIM or email Attorney Gonzalez-Sirgo directly at [email protected].