What Is Tuition Insurance And Why Didn’t My Father Take Out A Policy?
With the fall semester fast approaching, you’re probably busy helping your college student(s) buy clothes, dorm room essentials, apartment furniture, etc. That’s on top of the tuition, room, board, and all those miscellaneous fees. But are you also looking into tuition insurance? It has been around since 1930 but not everyone is aware of the potential benefits.
According to Forbes, tuition insurance is a type of insurance policy that provides coverage for the cost of attending a college or university in the event that a student is unable to complete the academic term due to covered reasons. If the student has to withdraw from school for covered reasons, tuition insurance can help reimburse the costs of tuition and sometimes other related expenses (housing, fees), depending on the policy.
Tuition insurance may cover the following reasons for withdrawal:
- Illness
- Injury—such as sports injuries and vehicle accidents
- Student’s death
- Tuition payer’s death
- Mental health conditions, such as severe depression or anxiety
There are some exclusions, such as risky behaviors (e.g. drug use, extreme sports) and even fear of Covid-19. And in case you’re wondering, failing a class is not covered either. That’s on you.
I know what you’re thinking, because it’s the same thing I’m thinking. I’m already spending thousands upon thousands of dollars on tuition, room, and board? How much more will tuition insurance hurt? Actually, it’s not terrible. On average, a policy typically costs around 1-5% of the tuition amount. For example, if the annual tuition is $20,000, the insurance premium might range from $200 to $1,000 per year.
I’m surprised my father never purchased a policy when I was in school. Let’s just say the beginning of my four-year college career was shaky, at best. Even though tuition insurance doesn’t cover laziness, my old man would have totally been justified in pulling me out of there and asking for his money back. Thankfully, he’s a patient man, and I turned it around in my sophomore year.
