As the kids get ready to head off to college, you might want to take a moment and read the smart spending article by John Ewoldt, of the Minneapolis Tribune-Review





While no one wants to imagine the death of their child, taking out insurance on your son or daughter — or asking them to purchase their own plan — will protect you from being hit with mountains of debt should tragedy strike.

And the policies are pretty cheap. A basic plan with up to $250,000 in coverage can cost as little as $15 a month for a young, healthy college student or recent graduate. That’s a whole lot less than the loan payments you could be stuck with — which average more than $200 a month.

Such a move would have been life altering to Steve and Darnelle Mason, who lost their daughter Lisa five years ago.

Trying to pay back the $100,000 in private student loans they co-signed for their daughter has been a financial nightmare.

“I absolutely wish we had [a life insurance] policy,” said Steve Mason. “We would not have struggled financially for the past four years with these private student loans, and our credit would not have been ruined.”

Federal student loans are forgiven by the lender when a borrower dies, but private lenders aren’t required to provide any such relief.

That’s one reason it’s important to get as much federal aid as possible before turning to private lenders. And for parents, it means not co-signing on a loan unless you have the means to repay it.

Another reason for caution: student loans can rarely be discharged in bankruptcy.

But for many parents, getting their child a good college education is non-negotiable — and that’s when life insurance can provide a little peace of mind, says Eleanor Blayney, a certified financial planner and consumer advocate for CFP Board.

Jennifer Boughan, 47, purchased life insurance policies for her three daughters as soon as they enrolled in college. Each policy costs around $150 per year and provides $100,000 in coverage, enough to cover each girl’s $50,000 to $60,000 in private and federal student loans should something happen.

“These policies are in case — and God forbid — the worst that could happen, does,” said Boughan. “Seems to me that is a far better expense than to have to face the devastation of what comes after the tragedy of a lost child.”After hearing about the financial blow some grieving families have faced, Joseph Barbano took out an insurance policy for his college-bound son.

Barbano hasn’t had to take out loans yet, but he thinks he may need to down the road and wants to protect himself just in case. The 20-year term policy he took out for his son costs less than $20 per month and provides $250,000 in coverage.