<p>We just received a mailing from Princeton, where our child will be starting as a freshman this fall. They gave us information about something called Tuition insurance, which would protect us and refund some tuition in the event of our student having to withdraw for medical reasons. We are full pay (both of us work full time in the northeast and that puts us beyond the financial aid limits). </p>
<p>Can you give us any info about this type of insurance? Has anyone purchased it, and what questions should we ask? What are the pitfalls, if any? </p>
<p>Cluelessmom2, you need to pick the college you child attends from the selection menu and read the term carefully. I just compared Princeton’s and my child’s college’s, the coverage and cost are very different. </p>
<p>At my child’s summer orientation, I did ask the staff from Bursar’s office how many families purchased the plan, if I remember correctly, it’s somewhere 30% for our college.</p>
<p>We always purchase tuition insurance, ever since I nearly had to withdraw from school during finals week my sophomore year for emergency surgery. We use the one from Dewar. I haven’t read through the conditions yet for this year, but I remember reading in last years paperwork that medical withdrawals due to mental health conditions were covered but only if the student had been hospitalized for a certain amount of time (maybe at least 2 days?) so that is useful but not exactly ideal.</p>
<p>I was a perfectly healthy student who was involved in competitive sports and everything until my sophomore year. You just never know when things will change.</p>
<p>Clueless Mom - We’re in the same boat as you (full-pay at an Ivy). We are tightening our belts for the next 4 years, so the thought of having to pay around $50K if my child were forced to leave school for a health reason makes me feel ill! The premium for us is $274 for the year; I think that’s a reasonable price to pay for the peace of mind. You just never know.</p>
<p>Interestingly, our children went to a private day school for K-8th and the premium cost for that was significantly higher than for college, even though the tuition was much lower! We didn’t take insurance back then, as we knew the school and administration well, it was small and I knew that they would work with us if there was a problem (fortunately, never had to test that theory.)</p>
<p>I would love to find out the stats on how many students actually use the insurance. Generally, this is available and, I think, required to be disclosed by the insurance agency. Same deal…we are paying full freight and a bit of external scholarship…the amount is about $300 per two semesters to insure $25,000 per semester. Keep in mind you never have $50,000 at risk so that you keep the economics straight in your head. Nevertheless, this is less than I pay for collision car insurance for a $25,000 car …but my child is very unlikely to need to withdraw…no competitive sports, healthy young man with one potential long-term health issue.</p>
<p>In the policy that they offer us, I can’t see anything about pre-existing conditions…so if my son has an enlarged aorta (but no worries right now) and it suddenly weakens and he needs surgery–is the policy still good? we have until the 23 to decide so I plan to spend some time working through this and will post what I learn soon…</p>
<p>No firsthand experience, but a friend bought it and is very thankful she did as her ds fell from an upper bunk (don’t ask), hit his head on a desk and ended up withdrawing for the semester. The particulars of her policy said that he could not receive ANY credit for that semester, so while profs were nice and offered to work with them on grades and such she was careful to make sure he didn’t accept that help or they wouldn’t have gotten the money back.</p>
<p>I would read the conditions carefully and ask questions BEFORE you purchase anything. We were offered it at our kids’ private HS & again in their college. We have opted not to purchase then & now. The Dewar policies they were offered does not cover if the student does a partial withdrawal, only a FULL withdrawal. To date, even with their chronic health issues, they have never had a full withdrawal from school, even when they missed 1/2 a year of HS. It’s a risk/benefit analysis, like all insurance. S has graduated from college now & would never have qualified to claim under it. Likewise, D would never had qualified, even when she withdrew from several classes in HS & college.</p>
<p>I know some who have purchased the insurance for “peace of mind.” I like to save the premiums & use it for other things. Premiums vary greatly between schools; probably depends on the claims history of the kids who attend and/or the risk pool associated with that school. Our kids’ U does encourage purchasing it & it was about $168/semester (about $25+K in tuition/semester). If we guessed wrong & somehow we do need the insurance, I guess I’d be sad. I suspect the U would be willing to work with us & our kid if something happens. but we are willing & able to assume that risk.</p>
<p>The annual cost/benefits does indeed vary considerably from school to school. We bought it for D for all 4 years – it was quite inexpensive. Her junior year I called Dewar to ask about her study abroad semester in the spring. They wouldn’t cover that (D went with a program not affiliated with her school) but let me pay half the annual insurance to cover 1st semester.</p>
<p>Last year S started at another school. The insurance offered by Dewar was more than for D, and terms were slightly different – but since we’re also full pay, we did buy it. </p>
<p>After the fact, when you haven’t needed it, insurance always seems like an expense you could have done without. But if you need it and don’t have it …</p>
<p>Keep in mind that you’re insuring the difference between the college’s refund policy and the plan’s. You never have a full year’s tuition at risk, at most a part of a semester.</p>
<p>Consider too that late in a term, many colleges will grant incompletes with the chance to make up (and therefore not waste the tuition $) later. </p>
<p>If I recall correctly, these policies tend to be limited to refunds for withdrawal. That turns out to be a pretty rare event. Add in the various restrictions, and I think you’ll find it is a much better deal for the insurer (and probably the university, who no doubt gets a big commission?) than for the parents.</p>
<p>It’s always a risk/benefit analysis for the particular circumstances involved. For our family, the instructors were ALWAYS willing to work with our kids, even when they had missed 1/2 of the academic year due to health issues. D has had more withdrawals & incompletes than she would like due to health reasons, but the tuition insurance would NOT have covered those and she never completely withdrew from any term in school. Over the years of private school & college, we have saved 14 years of premiums, which helps cover other expenses our kids need. As we don’t plan to purchase it for the next two years of D’s college, we expect to save another 2 years of premiums as well. S graduated in the spring and would never have made a claim. We would never have made a claim yet for D either.</p>
<p>For some families it DOES provide peace of mind, but I’d suggest families read the policies carefully & fully before they decide whether they are really purchasing anything of value to them & their situation. In particular look as to what is included, excluded, pre-existing claims, required documentation, when the claim must be filed, etc.</p>
<p>Long term care insurance can be similar–lots of policies make it VERY difficult to make claims and cover a lot less than people who pay premiums for years & sometimes decades believe. It can be very sad when they don’t have the protection they thought they did. Travel insurance & all other policies need to be carefully scrutinized in this manner as well so you get the protection you think you are at the price you are paying. You can’t change the terms later, you are bound by the terms you sign up with.</p>
<p>If it was not profitable to them they would not sell it. That said I purchased it last year and thankfully did not use it. It is a minor cost in the scheme of things college wise.</p>