Millennials, talk to your parents about student loans


Adam Cecil

Adam Cecil

Former Staff Writer

Adam Cecil is a former staff writer for Policygenius, a digital insurance brokerage trying to make sense of insurance for consumers. He is a podcast producer, writer, and video maker based in Brooklyn, NY.

Published February 11, 2015|4 min read

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Updated on March 6, 2018: A lot happens to you in the first ten years after you graduate college. You start your career, you might start a family, and you learn more about yourself than you really wanted to know. It is an awesome and exciting time of your life unlike anything you’ve ever experienced or will ever experience again.

Now let’s get to the crappy parts. One: The economy sucks. It’s hard out there for a millennial. Having a college degree doesn’t guarantee you the sweet, high-paying job your high school guidance counselor promised you.

Speaking of college degrees, you, on average, have the highest student loans of any generation, ever, in the history of higher education. Congrats, you’re #1 at something.

Not only that, but the economy doesn’t just suck for us. It sucks for our parents, too, who most likely experienced the brunt of the recession.

People saw retirement accounts dry up and some lost jobs. There’s also a pretty good chance your parents were or still are paying off graduate school student debt, plus any loans they took to pay for your college, plus paying for cars and their house and the cat and that cable subscription you use to watch Game of Thrones.

So what’s the upside? Millennials are more comfortable talking about money with their parents than any generation that preceded them (At least that we can measure. Who knows how ancient Romans talked to their parents about money?). Millennials and their parents are pretty open and honest with each other about money.

Why millennials should consider life insurance

So use this opportunity to explain to your parents that you need life insurance.

"Life insurance!?" you may gawk. "But I’m young and fit and spry!" OK, great, but you might get hit by a car. Wait, we were kidding, don’t go! We’re not trying to scare you into thinking you’re dying. Remember when we were honest about the economy being crappy? We’re the same way about life: Sometimes, life deals you a bad hand. Don’t let your parents’ financial well-being be decided by the roll of a die. Also, stop us from making more gambling metaphors.

You might not need life insurance. Maybe you have a great job and no student loan debt and a plump savings account. But it’s much more likely that you have private student loan debt, and a lot of it. And if you have private student loans, there’s a really good chance that your parents are co-signers on that debt.

And if you die before you finish paying off that debt, your parents will still be responsible for it. A life insurance policy gives your parents a big lump of tax-free cash they can use to eliminate the remaining debt. Without it, they have to deal with their kid dying and doubling or tripling their debt load at the same time.

OK, we just reread that last sentence - we’re not trying to make you feel guilty about your possible (but eventual) death. But it’s always something to think about: If you die, what do you leave behind? Private student loans never go away. Loans in general are part of the reason this economy sucks in the first place. But you can be smarter than your student loans.

Enter term life insurance

A simple term life insurance policy, which can be as cheap as $10 a month if you’re healthy, can protect your parents from having to take on your student loan debt. Since you’re young, the policies are cheap, and you only need them as long as you still have your student loan debt.

Think about it: For approximately the price of Netflix, you can save your parents from a possible financial ruin. For approximately the price of a single Chipotle burrito every month, you can destroy student debt. Seriously, you can buy iPhone apps that cost more than a life insurance policy. And if you can’t afford it, maybe your parents will pay for it. A little known fact: Parents are allowed to take out life insurance policies on their kids (and vice versa).

Parents taking out a life insurance policy on their adult kids? It’s not as weird as you think. It’s actually kind of a trend, according to one writer at the Huffington Post. We wrote an entire blog post explaining to parents how they can buy a life insurance policy on their kid. If you don’t want to bring up this topic to your parents ("Hey Mom, hey Dad, what would you do if I died?"), maybe you can just email them that article. Or post it on their Facebook walls, since everyone and their dog has a Facebook these days.

To learn more about life insurance, visit our Learn Center.

Image: gradyreese