Should I buy insurance to cover my student loans?

For many people, student loans are their biggest debt.  For some even larger than their mortgage.  Obviously when purchasing life insurance you want to have enough to cover your expenses.  Thankfully when considering what amount to come up with, student loans does not have to be one of them.

One of the good things about student loans is they will never be a burden on your family after your death.  This is because student loans die with you. In fact if you have a Parent PLUS loan and the borrower or the student dies, the loan is forgiven as well (or whatever portion of that particular student’s loan exists).  The only thing you have to worry about is whatever loan amount that is forgiven is taxable.  As always consult with a tax professional on how to deal with this scenario.

The lesson in all of this is when you die, your student loan dies with you.  No one will attempt to collect the debt from another family member.  To make this process happen, please have someone contact your servicer.  They will get all the pertinent information needed (such as funeral home, date of death, location, etc.).  Then the contact person established will receive information to mail in a death certificate so the process can begin.  In such a tough time, it is good to know this is one thing that can be made fairly easy.