Ask Joan
Week of February 29, 2008 • Previous Question ArchiveMs. Sabella has managed MainStay Balanced Fund since its inception in 1989. She is a Managing Director and has been with NYLIM since 2000. Prior to that, she worked at Towneley Capital Management, Inc. for 22 years. Ms. Sabella is a member of the Financial Planning Association, Financial Women's Association, and the CFA Institute. She holds a B.B.A. from Baruch College, is a Certified Financial Planner, and is a Chartered Retirement Planning Counselor.
Got a question you'd like Joan to answer?Ask Joan Now
Q: We have four grown children. Two of them are still completing graduate studies in college. We have co-signed several college loans for both over the past several years, which total approx. $80,000. If anything were to happen to either one of our two youngest who are still in college, I'm afraid the burden of their college loans would fall with us. We would be financially devastated. Should our adult kids carry Life Insurance that will cover the amounts of their loans?
A: In checking with our New York Life Insurance expert, Life insurance is often purchased for the death benefit protection and the proceeds can be used as protection to cover an outstanding debt in case of an unexpected event. Should anything happen to one of the children, the obligation of their student loan could revert to your family. Considering their younger age, initially Term Life Insurance might be the most cost effective and feasible option.
As your children become more financially stable and independent, the Term can be converted to a permanent insurance policy. If your children are reluctant to purchase the insurance on themselves, it may be a wise decision for you to apply for and own the policies. A New York Life agent can analyze your specific financial situation, discuss the uses of life insurance, and help you determine how much coverage you may need to protect your family.
Be the first to Comment
= external link that opens in new window...