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Don't cosign your kid's loans without life insurance
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2012 Oct 18, 4:46pm 3,557 views 7 comments
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Eman
2012 Oct 18, 5:01pm
"As a father, you'll do anything for your child." This is so true. I cannot argue with this statement.
EastCoastBubbleBoy
2012 Oct 19, 11:31am
my parents took out a term life policy on me shortly after I went of to college... don't know how long of a term it was, but the loans that they cosigned on are long since paid off.
It's tough to think about, but you always need to do what you can to cover your bases. As Monty Python said... nobody expects the Spanish inquisition!
B.A.C.A.H.
2012 Oct 20, 3:55am
Dang. I worked with a technician who has bigtime PLUS payments. He told me that many of his neighbors in Salinas took out loans against their houses to pay for "stuff". They were foreclosed open and all of the vacant homes on his street brought down the value of his home and he still has the PLUS payments.
Poor guy. I didn't have the heart to tell him too bad he didn't finance his kid's education with the equity loan then walked away like his neighbors did. Probably he thought of that one already.
B.A.C.A.H.
2012 Oct 20, 5:09am
my parents took out a term life policy on me shortly after I went of to college
Brilliant.
Everyone is an individual, and every individual's paths are individual. But so many people follow a path that includes a car expense, a partner, a childcare bill (or a single-income parenting responsibility), a need for educational expense for new dependents. Some of these paths may even include debt.
The time to get the term life policy is when we're healthy teenagers or young adults, when the premium will be cheap. Because of the typical arc of the typical life of the typical young person, that's when the insurance is most needed.
Call me stupid for not "thinking of it myself". Yes I am stupid. Every once in a while I read something on a blog that I am glad I learned. Thank you for sharing.
New Renter
2012 Oct 20, 5:26am
over $160k for a degree in music?! How did he expect his kid to pay off those loans at all?
B.A.C.A.H.
2012 Oct 20, 5:29am
Renter,
yes your snarkey comment is spot-on. But we can also learn from other people's mistakes.
Francisco Reynoso cosigned on over $160,000 in loans that allowed his son Freddy to attended Boston's Berklee College of Music in 2005. In 2008, his son died
"As a father, you'll do anything for your child,†Reynoso, an American citizen originally from Mexico, said through a translator. Reynoso is a gardener making $21,000 per year.
When Freddy died in 2008, Fransisco was left with a $160,000 debt amortizing to $271,000. He didn't understand that death didn't take care of it.
Life insurance would have helped a lot.
http://www.propublica.org/article/grieving-father-struggles-to-pay-dead-sons-student-loans