NEW YORK--(EON: Enhanced Online News)--At a time when doctors, dentists, veterinarians and other advanced degree professionals are graduating with student loan debt between $160,000 and $205,0001, The Guardian Life Insurance Company of America (Guardian) is breaking ground as the first individual disability income insurance provider to offer a way for them to meet their student loan obligations if they become too ill or injured to work.
“While their long-term earning potential may be strong, these recent graduates are extremely vulnerable in the first decade of their careers, when they haven’t had enough time to accumulate savings to cover their monthly loan obligations – not to mention their rent or mortgage – without a paycheck.”
Available as optional coverage that can be layered onto Guardian’s ProVider Plus or ProVider Plus Limited disability income (DI) insurance policies, Guardian’s Student Loan Protection Rider allows professionals to secure up to $2,000 per month – in addition to the monthly income replacement benefit they’d receive as part of their base policy – to stay on track with their loan payments.
Unlike many other kinds of debt, student loans cannot be discharged in the event of bankruptcy. Many graduates assume that federal student loans come with guarantees in the case of disability, but the government’s standard is far more restrictive than the typical DI insurance company’s definition. Under current law, only individuals with “total and permanent” disabilities can have their federal student loans discharged. The vast majority of income-disrupting disabilities, such as back problems and many forms of cancer, generally don’t fall under this definition. And private loans may not have any provisions for disability at all.
Available for as little as $5 per month2, Guardian’s Student Loan Protection can be obtained for either a 10- or 15-year term. Applicants can insure all their student loans at once – including undergraduate debt – from multiple sources, up to $2,000 per month. No loan documentation is required until a claim is filed.
“Professionals leave graduate school with enormous student loan balances on top of their undergraduate debt,” commented Gordon Dinsmore, President of Berkshire Life Insurance Company of America, the Guardian company that issues its individual DI insurance policy. “While their long-term earning potential may be strong, these recent graduates are extremely vulnerable in the first decade of their careers, when they haven’t had enough time to accumulate savings to cover their monthly loan obligations – not to mention their rent or mortgage – without a paycheck.
“Our Guardian financial representatives report that the greatest financial fear cited by younger clients is that they’ll default on their student loans if a disability prevents them from practicing the profession they’ve invested so much time and money to enter,” Dinsmore added. “For a very affordable price, we’re able to provide some peace of mind so they can focus on growing their careers.”
A mutual insurer founded in 1860, The Guardian Life Insurance Company of America (Guardian), New York, N.Y., and its subsidiaries are committed to protecting individuals, business owners and their employees with life, disability income and dental insurance products, and offer funding vehicles for 401(k) plans, annuities and other financial products. Guardian operates one of the largest dental networks in the United States, and protects more than six million employees and their families at 115,000 companies. The company has approximately 5,000 employees in the United States and a network of over 3,000 financial representatives in more than 80 agencies nationwide. For more information about Guardian, please visit www.GuardianLife.com.
1 Financial Planning Issues for Dental Students, American Dental Association, March 2013; Association of American Colleges 2012 Survey; “High Debt and Falling Demand Trap New Vets,” The New York Times, February 23, 2013.
2 Monthly additional cost for a 30-year-old male, occupation class 4M, 90-day elimination period, 15-year term, generic non-discounted rates, $500 monthly coverage.