A reader recently inquired about the disadvantages of obtaining a private student loan.

In light of the current low-interest rates, she questioned why she shouldn’t obtain a private student loan. To secure the best rate, she would have to cosign the loan with her daughter.

The main risk of a private student loan is that the cosigner is equally responsible for the debt, was the advise I gave. Therefore, if something were to happen to her daughter and prevent her from graduating and finding employment, she would be responsible for the debt.

Tuition insurance is one option available to parents to safeguard them when it comes to paying for their children’s tuition.

Below, we share our top recommendations for tuition insurance companies as well as our best advice on how to get tuition insurance.

What is Student Loan Protection?

You obtain homeowners insurance when you buy a house. You insure your new automobile when you purchase it with an auto insurance policy.

While you don’t buy insurance to ensure that an accident won’t happen, you do so to ensure that you’ll be covered if it does.

College is one of the greatest investments people make, with tuition costs rising at both public and private universities.

If you become ill and have to leave school in the middle of a semester, a tuition insurance company will pay your expenses even though your institution or university would not.

Few companies sell tuition insurance, which protects your investment in a college degree by paying for your tuition if you have to drop out for one of the predetermined reasons in the policy.

What Is Covered by Tuition Insurance?


The cost of tuition is high. The average price of in-state public university tuition in 2018-2019, per the College Board, is $21,370, while the price of a private education is $48,510.

Without tuition insurance, you can certainly say goodbye to your $20,000–$50,000 if you have to withdraw from school due to a medical emergency, particularly beyond the school’s withdrawal period (which is often no more than a month).

The majority of policies for tuition insurance cover up to about $50,000 annually, making it intended to assist you in avoiding such situation.

Although each carrier may be different, you can often anticipate to receive coverage for withdrawal for the following reasons:

  • Leaving a Medical Disability
  • Death of the Student
  • Other Disability Withdrawal caused by ailments of the mind, body, or spirit

You will be on your own for any other reasons. You cannot receive a refund if you decide to voluntarily leave school since tuition insurance does not equal dropout insurance

In other words, academic withdrawals such as failing out of classes, being expelled, or changing schools will not be covered by your tuition insurance coverage.

Organizations That Provide Student Insurance


Only a small number of carefully chosen providers that focus on this kind of coverage provide tuition insurance. Let’s examine what they each have to offer.

GradGuard


It’s clear why GradGuard is our #1 choice for tuition insurance.

GradGuard, which provides coverage at hundreds of schools and institutions nationally, was created expressly to assist college students and their parents in protecting their investment in a college education.

Tuition insurance and college renters insurance are the two insurance options offered by GradGuard.

GradGuard offers 100% compensation for tuition and room and board when you withdraw due to major physical problems, ongoing conditions, or psychological issues through a partnership with Allianz Global, a respected carrier.

Additionally, they aid in making travel arrangements for parents to see their hospitalized children as well as transportation plans for unwell and wounded kids.

AW & GD Dewar


Another supplier of tuition insurance for K–12 private schools as well as colleges and institutions is A.W.G. Dewar.

Dewar has been providing its College Tuition Refund Plan, which covers tuition and room and board for documented medical withdrawals, for almost a century.

The way Dewar’s plan operates is to first completely repay tuition beyond that amount for the remainder of the semester, supplementing any step-down refunds offered by the institution or university (if any).

The business has an “A” rating from A.M. Best, which attests to its credibility as an insurer.

Dewar also asserts that its tuition insurance policies, which cover a sizeable portion of the tuition paid, are offered at competitively inexpensive prices. Dewar can be a smart choice if you’re searching for affordable rates at the tradeoff of slightly less comprehensive coverage.

Education Insurance Plans

Instead of providing tuition insurance as previously described, Education Insurance Plans is an insurance company that offers riders and life insurance policies specifically designed for college students.

EIP positions itself as a company that offers more specialized services than only paying back tuition to safeguard education lenders, students, and parents.

The InsureMyTrip plan, which is intended for college students traveling and studying abroad, is one of EIP’s distinctive offerings.

If your academic study abroad trip is canceled or delayed due to evacuation or medical issues, this Nationwide plan does give tuition protection.

Some of this insurance also include extra features like travel help, emergency support, and baggage protection.

In addition to paying for study abroad tuition, EIP provides access to Ameritas disability insurance with student loan riders and cheap term life insurance via Haven Life.

Should parents and college students buy tuition insurance?


Knowing the benefits of tuition insurance could spark your curiosity.

Whether you think the peace of mind a coverage provides is valuable will determine whether you need tuition insurance.

Here are a few things to consider when you determine if you need tuition coverage:

  • Period of withdrawal: Timing is everything. If you withdraw during the first few weeks of the semester, the school’s rules could already apply to you. If you withdraw at the very last minute, you might be able to work out a deal with the instructors to get a passing mark and get credit for the course.
  • Coverage Length: Typically, your policy will only provide coverage for the current semester. You must determine if taking the chance at that period is worthwhile.

  • What’s Covered: The effectiveness of tuition insurance is constrained to a little period and a small region of coverage because it only covers authorized health concerns.
  • Cost: Tuition coverage is quite inexpensive when compared to other insurance options. Just a few hundred dollars might be used to pay for a $50,000 tuition investment.
  • Your medical requirements: If your medical condition is covered and you worry that it could affect your schooling, you might want to think about purchasing coverage.
    Tuition may be expensive, but tuition insurance is not.

To determine whether purchasing tuition insurance is the best course for you, you must eventually assess the risks and expenses.

Check the return policies for your institution or university as well.

Your insurance plan is an investment, just like your tuition, and it typically yields a meager return.

Here’s How Much It Costs Right Now


The average cost of tuition insurance is one percent of the entire cost of tuition.

GradGuard would charge $198 for a typical tuition semester-long security package, which would cost you $20,000.

The $198 would cover up to the full tuition amount for authorized illnesses, injuries, psychological disorders, the death of the student, the passing of the student or tuition payer, and up to $1000 for housing, books, and other fees. It would also cover up to the death of the student or tuition payer.

As long as your withdrawal was caused by one of the situations covered by the insurance, it offers excellent cost protection.

The flexibility of policy amounts is another encouraging development.

You can enter your school and choose the amount of coverage with GradGuard’s free quote tool, so you can decide to pay only a portion of your tuition if you so desire.

To Look For in Tuition Coverage


Since there are so few providers of tuition insurance, you can anticipate finding the same policies and costs everywhere.

Initially, you should seek out the most comprehensive coverage that satisfies your demands and is within your price range.

Make sure to read the small print and confirm that a relevant incidence during the semester would be covered if you have a pre-existing ailment.

Strong policies, like those provided by Allianz, will pay for catastrophic injuries, pre-existing conditions, as well as diseases like anxiety and depression.

For an additional fee, you may choose insurance that covers any unanticipated event that results in your withdrawal from the semester. You can also choose the coverage that includes family crises.

Requisites for applying for tuition insurance

It’s easy to apply for tuition insurance coverage. Most tuition insurance policies don’t need a medical checkup to qualify for coverage.

Simply enter your personal information, choose a policy that suits your needs, and input the coverage term and amount.

Your coverage will start when you pay for your insurance policy, and it will last for the whole semester that you specified in your application.

How to Make a Claim When It Is Required


The student or tuition payer, the school’s registrar, and the treating physician are all parties to the GradGuard filing procedure.

The Dean’s or Registrar’s Office fills out papers verifying the cause for your withdrawal and the amount of tuition the school would repay, if applicable after you approve the release of your medical and academic information.

The doctor then responds to a series of inquiries to clarify the specifics of the student’s injury or sickness and their advice to withdraw.

Conclusion: Buying tuition insurance can be a great investment.

Tuition insurance may be a wise investment if you plan to pay for your child’s education.

Tuition insurance, however, is a requirement if you are cosigning a loan for your child’s education to protect yourself if something unfortunate happens to your child.

Tuition insurance may be an economical option for students who are paying for their schooling to safeguard their investment if something goes wrong.

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