Tuition insurance or tuition refund insurance is an insurance product that is available to protect the cost of tuition when a child gets sick and needs to leave school. This type of insurance can come in a variety of forms including compulsory, mandatory or required of a student or parent, an opt-out as well as voluntary. Some college policies require that the entire amount of tuition be paid after a certain period without a tuition insurance policy.
Types
Various schools or colleges that are located in the United States or the United Kingdom may use various forms or types of tuition insurance if it is offered at all. Schools that do not offer refunds for tuition may make coverage mandatory and apply the cost of insurance to the tuition amount. Other schools may include a fee in the cost of tuition but parents can waive or opt-out of the fee. Some schools may offer tuition insurance as an option during a student's registration.
Knowing Options
Parents should research all of the options that are available before purchasing tuition insurance when their child is enrolled in school. Insurance for a child's tuition may be required for some types of private schools or can be waived if tuition is paid in full at the start of the school year. Tuition insurance is normally voluntary for most colleges and universities. Tuition insurance may not be necessary for college tuition because most will offer a refund within the first few weeks after the start of the semester.
Coverages
Coverage options and information is normally sent out by the school where the policy was purchased before the first payment for tuition is due. Policies may have certain restrictions or provide more coverage options depending on what was purchased. The circumstances for a student's withdrawal can also be indicated on the policy. A policy for a child in a K-12 school may cover more circumstances for withdrawal than a policy for a college or university.
Evaluating Risks
Tuition insurance that is purchased can add to the cost of a child's tuition and the risks need to be well thought out before purchasing a policy. Unless a school requires a policy to be purchased, it may not be needed unless a child has a strong chance or becoming sick and leaving school. Parents who may be changing jobs or locations often may require tuition insurance as well as parents who are worried about maintaining their job.
Georgetown College
Georgetown College in Kentucky, for example, offers a Tuition Refund Plan, which is available to students that can help them recover the cost of tuition in the event of a medical or psychological hardship. The plan is offered as an extension to the refund policy that is already in place at the college. Students that live on campus can recover costs for tuition as well as those for room and board. Students that live off campus can obtain coverage for tuition only.
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