Life Insurance

[ewing]

So my parents recently asked me to look into getting life insurance. Thier argument was as follows: They owe 40K in PLUS loans for my undergrad, which I've agreed to pay back and I owe 20K in private loans (CitiAssist) that they've co-signed on. I also owe about 20K in Stafford and Perkins loans--I'm not sure if they co-signed on them. They claim that if I were to die or become disabled, they'd be left holding the bag on all of this debt, and it would ruin their financial security in retirement. So, they think I should get 100K in term life insurance, which they think will be really cheap for me because I'm young and healthy.

A few questions:

1. Are they right about them being left holding the bag or are loans forgiven if the student dies?

2. I'm starting med school in the fall, and I'll be borrowing 38.5K in Staffords and maybe another 15K in private loans per year for 4 years. Do they have to co-sign on those too? Do I need more than 100K in life insurance?

3. Any reccomendations of what kind of insurance product is right for my needs and where to get it from? I know AMSA works with Minnesota Life--does anyone have any experience with them?

Thanks!!

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[BassDominator]

If you die, your loans are forgiven. I'm not sure how disability works.

You don't need a cosigner on federal med school loans.

I wouldn't worry about the life insurance until you have a wife and/or kids.

 

[ewing]

If you die, your loans are forgiven. I'm not sure how disability works.

Even the PLUS loans which were made to my parents to cover their EFC?

 

[southerndoc]

When you become a medical student, join the ACP-ASIM. When I joined, they gave students a free life insurance policy.

I agree with Bass. You only need life insurance if you have a wife or kids, or if your parents cosigned for large loans (e.g., a house).

Student loans are canceled for death or severe disability according to the ED student aid website: http://studentaid.ed.gov/students/p..._2004/english/loan-discharge-cancellation.htm

The PLUS loan is also forgiven: http://www.ed.gov/offices/OSFAP/DCS/loan.cancellation.discharge.html ("In the event of the borrower's death, or on or after July 23, 1992 the death of the student for whom a parent received a PLUS loan, the obligation of the borrower and any endorser to make any further payments on the loan is discharged.")

Not sure about the private loans though... you'll have to contact the lender for more info.

 

[dredd]

I agree. The private loans can be tricky, especially since you have a co-signer. If you do end up needing life insurance, I'd recc looking at one of the med school organizations for life insurance. The AMA and AAFP also have really good deals for life insurance, much cheaper then you'd be able to find out in the private sector.

 

[southerndoc]

I agree. The private loans can be tricky, especially since you have a co-signer. If you do end up needing life insurance, I'd recc looking at one of the med school organizations for life insurance. The AMA and AAFP also have really good deals for life insurance, much cheaper then you'd be able to find out in the private sector.

Some organizations offer free life insurance (ACP-ASIM did).

 

[dredd]

They may have recently changed their policy, or your schools chapter may have paid for the premium for you guys. Either way, it's not free, but it's about as cheap as the ones offered through AMA and AAFP.
http://www.acponline.org/public/groupins/ten_year.htm