Does a College Student Need Life Insurance?

Here's how a college student can decide if life insurance is a necessary purchase.

As a college student, life insurance may not seem like a top financial priority. In fact, many people who are in college are still relying on their parents for financial support -- rather than offering support to other people who would be affected by their untimely death.

But, the reality is, there are some circumstances when students may wish to buy a life insurance policy. Here's why. 

Should a college student buy life insurance?

Whether a college student should buy life insurance is going to depend both on current and future circumstances.

Not all college students are in the same position. Some students don't work, earn income, or have anyone relying on them to provide services or financial support. But, others do. College students who have children of their own, or who have parents or other relatives relying on them for income or help doing life tasks, may need a life insurance policy to care for their loved ones. 

College students who do not currently have dependents may also want to think about buying coverage for the future. It can be cheaper and easier to buy life insurance at a young age. Getting a term life policy while in college may cost very little. And buying the policy while young and healthy can enable a college student to get protection in place before any pre-existing conditions develop that could complicate the purchase of coverage later on. 

A college student who plans to get married and start a family after graduating, for example, may benefit substantially from buying an affordable policy that will be in effect for the next 30 years or so. Once their plans come to fruition, the premiums on that policy will remain very low and it will offer important protection for their future spouse and children. 

Likewise, college students whose parents or loved ones would face serious financial hardships if they had to cover funeral costs, may want to buy at least a small policy to spare their loved one that fate should tragedy strike. 

How much coverage should a college student purchase?

In some cases, it can be difficult to determine how much life insurance to buy -- especially if a policy is being purchased with the plan to care for future dependents.

Generally, a person who is buying life insurance will want enough coverage to:

• Repay their debt
• Replace their income for the number of years their family will need it
• Cover their mortgage loan
• Pay for their children's education 

For a college student who doesn't yet have income or kids or a mortgage, it can be a real challenge to come up with this estimate. In this case, it may be better to opt for a simpler formula -- estimate the likely future salary that will be earned after graduating and multiply it by 12. 

Buying any coverage can go a long way toward making sure future loved ones are protected, though, so college students should look at what coverage is available to them -- and what fits within their budget -- when deciding on the best course of action for getting life insurance.