Student Loan Debt and Disability Income Insurance

If you become disabled while in school and have to drop out, disability insurance benefits can help you pay your student loans!

This is information that both students and parents should be aware of. If you become disabled while you're in school and have to drop out, you will be on the hook for your student loans, and disability insurance benefits can help you make those payments.

Disability Insurance for students makes the most sense if you're in school for a medical degree or other professional degree program, with the expectation that you'll be able to earn a large salary when you graduate. In fact, if you're not earning an income and aren't getting an advanced degree, you might not be eligible for this coverage in the first place. However, having an earned income isn't necessary for those pursuing advanced degrees.

As a parent, you may want to consider purchasing this coverage for your college student. You may either be responsible for a portion of their student loan debt, or you may not want you college student to miss payments and start their future working career behind the proverbial 8-ball!

How Disability Insurance Can Help Pay For Student Loans

Student loan debt is a big part of the reason to get disability insurance, whether you’re currently a student or already working. Since high-income professionals also tend to have a lot of student loan debt, disability insurance is especially important not only for doctors and dentists but also for everyone from lawyers to CPAs to pharmacists to software engineers.

If you’re totally and permanently disabled, the U.S. government may allow you to discharge any of your outstanding federal student loans. But private student loan debt may still need to be paid.

You can also purchase a student loan disability rider for your disability insurance policy. When you become disabled, this rider will pay a monthly benefit directly to your student loan servicer. These benefits are in addition to the usual benefit amount in your policy’s basic coverage, although not every profession is eligible to receive the rider.

This should be a conversation starter for those with clients that have college bound students!