5 Questions Students Have About Tuition Insurance
You’ve probably heard of people insuring their cars and their houses. You may have even heard of people insuring their body parts. Have you ever heard about people insuring their tuition?
Tuition insurance isn’t necessarily a common thing, but it definitely is something worthwhile for some students and their families. With tuition costs rising, the idea of paying such large fees can seem daunting to some families, especially if there are other risk factors involved. Tuition insurance mainly exists to put some of these fears to rest for the families that it is designed for.
If you’ve never heard of tuition insurance before, this article will help you explore exactly what it is, and more importantly, if you need to buy some yourself.
1. What is tuition insurance?
Tuition insurance isn’t a particularly common thing for most college students. In fact, it usually benefits the parents more so than it benefits students. In a nutshell, tuition insurance will reimburse tuition costs (or partial tuition costs) should the student drop out of school. Usually the students getting tuition insurance are ones with pre-existing medical conditions that could force withdrawal from school.
Because many schools don’t have regulated reimbursement policies in the case of student injury or death, tuition insurance alleviates the stress involved in paying hefty amounts for higher education.
2. Who usually gets tuition insurance?
As stated, most of the students who get their tuition insured have pre-existing medical conditions or a medical history that could force a withdrawal from their school. Typically, the parents who choose tuition insurance are paying a private institution with large fees. It’s usually assumed that the paying of such fees comes directly from the parents.
With the parents paying such a large cost for their child to attend school, potential withdrawal from that school could result in a lot of money lost. This happens because many federal student loans allow discharge of student debt if one becomes disabled or dies. However, private student loans do not have the same rules and do not have such discharges of debt.
3. How much does it usually cost?
Tuition insurance varies based on the amount of tuition paid. Essentially, tuition insurance usually works as a percentage of tuition costs. Tuition refund insurance can cost anywhere from 1 percent to 5 percent of total tuition costs. Depending on the overall amount, this means that the insurance could cost anywhere between $100 to $1,000.
Because the range is quite large, it would be wise to consult with a tuition insurance provider to calculate the estimated cost of tuition insurance based on your fees. Keep in mind that tuition insurance refunds will look different depending on various things like credit hours, risk involvement, and coverage.
4. What does it cover?
Most tuition insurance will cover things like forced withdrawal due to illness or injury, the death of a student, or the death of a parent. Different types of tuition insurance may also cover things like voluntary withdrawal, mental health withdrawal, relocation, or academic suspension.
However, there are exceptions to this rule to which the insurance won’t apply. Some of these cases may be intentional self-injury or withdrawals due to substance abuse. Be sure to talk with your provider about full coverage versus partial coverage. The amounts refunded will likely vary based on the potential events and how much the school refunds. Because the school will likely refund a certain amount should any incidents occur, the tuition insurance percentages may look different than initially proposed.
5. Do I need it?
Many students have never heard of tuition insurance simply because it isn’t a common or necessary thing. Because most 17-21 year olds are generally healthy and haven’t acquired major illnesses or diseases, they have little to fear about forced withdrawal from school. Many students also attend large public universities and receive fair amounts of aid in terms of grants, scholarships, and loans. It isn’t particularly common for parents to pay extreme amounts of tuition fees each year. If you’re planning for your future college career and tuition insurance hasn’t come up, the likelihood that you need it is quite low.
Now that you have a taste of what tuition insurance is, you can more aptly decide whether you need it or not. However, deciding to get tuition insurance should be a discussion for everyone involved in the college process. It’s best to speak to a real tuition insurance provider about what rates will be charged and what the insurance covers.
Make sure you talk explicitly about your concerns and what you want your insurance to cover to find the best tuition insurance plan for you. Much like your investment into your education itself, tuition insurance is something that should be thought about thoroughly. When studying, you don’t want your time or your money to go to waste.
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