What Do College Students Need To Know About Life Insurance? 
The most important thing for a college student to understand is that life insurance is issued on the basis of age and health . Normally young people can demand very low premiums for life insurance . The advantage of starting a life insurance policy when young is that there are fewer health concerns . The second thing that a college student should understand is that life insurance is all about statistics . If they have had a class in statistics understanding life insurance should be easy . There is a very large pool of people who would suffer significant loss if they died . They pool their risk so that those who experience this unfortunate event can be compensated by the very small contribution from the vast majority that survive . Inherent in this idea is that the probability of death increases with every passing year . This makes the amount each member of the pool pays into the pool increase each year because more of the participants will die in a given year . The third thing a college student needs to know is that life insurance companies are corporations that are based on the idea of legal reserves . Even though they know that a certain percentage will die of a particular age group they must maintain reserves in the unlikely event that the death rate is higher for some unknown reason such as war . These legal reserve companies are admitted to do business by the various state insurance commissioners . Their reserves are monitored closely to make sure that the companies can keep their promises . The fourth thing a college student needs to know is that even within a specific age there is a wide variation of health . I had classmates who died in their first year of college . One classmate died of a medical condition . This variation is like a bell-shaped curve . Most of the people are in the middle of the curve and are considered to be standard risks , however some are better than average and some are worse than average . Life insurance companies hire underwriters to evaluate the deviations and assign premiums that reflect how different the individual is from the standard risk . The reason that this is done is to maintain the risk pool and make sure it can keep its promises . The fifth thing a college student needs to know is that since life insurance is all about statistics the companies can develop a wide variety of life insurance plans . Some may appear superior while in fact their costs are comparable . There is merely a different design to the plan . For example a student could buy a one year term life policy for $ 500,000 for very little in premium . For a multiple of the premium he could buy a $ 500,000 whole life policy . Neither is good , nor bad . They are just different . The whole life policy will remain in force at the same death benefit for the lifetime of the insured without changing the annual premium . The one year term policy will either cancel or renew at a higher premium at the end of the policy year . If a person knew when they were going to die , they could choose a policy that would maximize benefits . However few of us have that information . The sixth thing a college student should know is that life insurance will probably form the foundation of their financial plan in the future . For this reason it is wise to select a life insurance agent who can service you for the foreseeable future . That doesnt mean to select a peer but rather someone with whom you can mature . The advice of the life insurance agent could be very important as you mature and your needs change . At some point you will probably own a great deal more life insurance . Family , debts and retirement all play a role in determining how much life insurance to carry . The final thing that a college student needs to know is that companies work hard to develop a reputation but the relationship with an agent trumps everything . If you have a good agent , you will find them to be very valuable in the future . 