Many people are making sure their tuition money is safe by investing in policies to ensure coverage.
Some parents who have realized the risk involved in the funds they spend on tuition are turning to education insurance to keep their investment safe.
Should anything happen during a student’s college career, recovering education costs can be difficult.
Colleges typically offer different forms of refund policies. That said, after four to six weeks into the semester have passed, the refund policies for most colleges will have expired. This means that it’s nearly impossible to obtain a refund for all the money after that point. Should something happen after that short time, it can mean a lot of lost money.
Of course, tuition insurance does exist and many students and parents use that to try to protect their investment, too. However, that coverage will usually become effective only if the student withdraws from school as a result of unexpected medical requirements. Moreover, even when a payment is possible, the precise amount of the payout depends on the specifics of the policy.
There is a lesser known form of education insurance coverage that allows parents to be reimbursed.
A small slice of the insurance industry involves policies that will provide parents with a cost reimbursement for unexpected student withdrawal. This type of niche insurance policy is for both private school and college tuition protection. It is an option a growing number of parents are choosing to make sure they won’t lose the money they’ve carefully saved and paid for their child’s education in case something unexpected happens.
“Whether you consider it depends on the severity of the financial hit you’d take by losing a semester’s worth of tuition or whatever a school refuses to refund, and the cost of insuring for that situation,” explained CFP George Gagliardi, a Coromandel Wealth Management financial advisor quoted in a recent CNBC report.
As a small part of the insurance market, there isn’t much of a standard on these types of policy. They come with different types of coverage and varying limitations regarding the amount of reimbursement and when the protection kicks in. For many parents, this is the peace of mind they have been seeking to know that the funds are safe if anything should happen.