The cost of tuition at public and private four-year colleges and universities continues to rise roughly 55.2% to 65.8% yearly, on average. Additionally, only 6% of colleges and universities in the U.S. surveyed by GradGuard (a tuition insurance policy distributed by Allianz Global Assistance) offer full refunds for students withdrawing for qualified medical reasons. If your school does not have an adequate medical withdrawal or refund policy, this financial fail-safe can help reduce your financial burden in cases of illness or injury. You can purchase tuition insurance from an insurer, but the school may also provide it. Some schools offer this type of coverage as part of a parent’s tuition package. Parents and students must know how much tuition insurance costs and what it covers before deciding whether they would like to purchase this type of coverage. Most colleges and universities will not refund 100% of the costs and fees owed, so purchasing a separate insurance plan may be ideal to close this gap. The amount refunded is relative to the level of coverage purchased. Some plans can reimburse you up to 100% of your total costs, but not every plan or company does so. Be sure to read the fine print and understand what your policy covers.
Types of Events Covered by Tuition Insurance
There are different tuition refund insurance options, including the entity from which you want to purchase the plan. This is true both for tuition reimbursement coverage provided by your university or college or purchased by you directly from a private third-party company, such as GradGuard, or a Tuition Refund Plan like the one offered by insurance agency A.W.G. Dewar. Colleges and university refund policies will typically cover tuition, but not usually room and board or academic fees. Furthermore, this coverage may only apply for a certain amount of time, often just for four weeks at the beginning of the semester. If you want full coverage, a “total cost of attendance” insurance policy will reimburse you for everything, but it can be more expensive. Typically, “physician’s authorized withdrawal” documentation will be required to receive a reimbursement.
Examples of Commonly Covered Events and Exclusions
The following are some events or emergencies likely to be covered by a tuition insurance policy:
Accidents or injuriesChronic illnessesNon-elective surgeriesSome mental health conditionsDeath of the student or an immediate family member
Common policy exclusions are:
MovingDropping outLosing desire to continue schoolingElective or cosmetic surgeriesPossibly COVID-19 coverageInjuries suffered while breaking the lawClasses switching to virtual attendance
How Much Does Tuition Insurance Cost?
Suppose you cannot attend classes due to an illness or injury, or other qualified reason. In that case, tuition refund insurance can cover the cost of tuition and fees associated with that event. At schools partnered with an insurance company, the cost for coverage is usually 1% of the cost of tuition. For schools not partnered with an insurer, you can still purchase a plan on your own. Such tuition reimbursement plans need to be purchased anytime before your first day of class. You can make a claim up to the last day of your term. The percentage of coverage and payout amount may vary depending on several factors, including the number of days you missed that term, the adverse event, and your insurer’s policies.
Pros and Cons of Tuition Insurance
The most significant benefit of this type of student insurance is peace of mind. It’s priceless knowing that regardless of unforeseen illness or injury that may happen, you’ll be able to help yourself or the student finish school with little to no financial burden. There are some cons to consider, however.
Pros Explained
Affordable pricing: Tuition refund insurance is affordably priced. You’ll rarely have to pay more than $300 per year for coverage.No time limits on coverage: There are no time limits on coverage, as long as you sign up before the semester begins and submit a claim before it ends.No deductible: This kind of insurance does not come with a deductible. You need to pay no amount (other than the plan cost) before being reimbursed for tuition after a qualifying event.Can cover the total cost of attendance: Unlike refund plans with your institution, tuition insurance can cover all your expenses or cost of attendance, including tuition, room and board, and fees.
Cons Explained
Plans may not cover preexisting conditions: Some medical or life events are not covered by these plans or by certain insurance companies. Tuition refund policies may not cover preexisting conditions, cosmetic surgeries, or certain life events. Check individual plan policies to be sure.Some medical or life events claims get low payouts: Some medical or life events may qualify you for a refund, but you may receive a lower payout than your full expenses. Again, be sure to read the fine print.Date cutoffs to qualify: There are firm cutoff dates to qualify for these plans. Take note of application and claim submission deadlines for eligibility.Epidemics and pandemics may not be covered: Many tuition insurers do not cover events related to epidemics or pandemics, such as COVID-19; however, some do. Check with your insurance provider.
How To Get Tuition Insurance
The first step in applying for this kind of insurance is finding a policy provider. Check with your school to see if it already offers this kind of coverage (usually bundled into tuition costs) through a partner company. If not, you can apply for coverage with a private company. Qualifications may include proof of enrollment, expected family contribution (EFC), student loan and financial aid information, and medical history.
