Why Tuition Insurance is Necessary

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Why Tuition Insurance is Necessary
You insure your property and valuables. Here's why tuition insurance is necessary when you attend private school.
Many parents think that tuition insurance is a waste of money or that they really don’t need it. Here’s why they do. When you sign the contract with the school, you are responsible for the annual tuition, room and board charges for the academic year. The school will have operating expenses which it must honor regardless of whether your child completes the full year or has to withdraw after the second month.

To protect themselves most schools offer you two options: you can pay the entire year’s tuition, room and board in one payment by July 15; if you opt to pay in two installments or in monthly payments, then you will be required to purchase tuition insurance.

What does tuition insurance cost? Typically you will pay .009% to 1% of the face value of the education charges. As noted above tuition insurance is mandatory unless you pay in one payment up front.

Tuition insurance affords protection and peace of mind for parents and the school. Specifically you would need tuition insurance in the event that your child is forced to withdraw from the school. There are several reasons why that might be necessary.

An illness or injury
The last thing any of us parents want is for something to happen to our darlings. All of us in our quiet reflective times breath a sigh of relief that we have gotten thus far without serious accident or injury to our children. But the reality is that the unexpected can and does happen. God forbid that anything should happen to your child which requires her to withdraw from school due to illness or injury. With tuition insurance, when the unexpected happens, at least you won’t be on the hook for the balance of the year’s school expenses.

Expulsion
Insurance is always protection against terrible events such as tornadoes, floods and other disasters. If your child is expelled from private school, your tuition insurance will pay the balance of the year’s expenses. Perhaps you are thinking that the school has no right to expel your child. What about due process? Can’t we tie things up for months with hearings and appeals? If you believe that you can do that, please read the fine print in the contract which you and the school signed. Consult with your attorney if you don’t believe what you are reading. There are no students’ rights here. You and your child are governed by contract law. The obligations of all parties are clearly spelled out in the contract which you signed. If your child breaks the rules, there will be consequences.

Death in the family
Another unexpected event which can and does happen is the death of a parent. If that were to happen in the middle of the school year, and circumstances forced you to withdraw your child, your obligation to the school would be taken care of by the mandatory tuition insurance.

Relocation
This kind of unexpected event is usually tied to a parent’s career. Suddenly there it is: the offer from your wife’s firm for her to head the London office. You are going to turn an offer like that down? Of course not. After all the firm is giving your spouse the full expat package which includes private school education for your children at an American school during your time abroad. But what are you going to do about the last four months at Shady Valley Country Day School? You are going to withdraw your children and make the move knowing that your tuition insurance will cover the balance of the year’s school’s expenses.

The benefits
The precise benefits of each school’s tuition insurance are spelled out in the tuition insurance contract. Read it carefully. If, for some reason, it does not cover unexpected events such as I have described above, then ask your family insurance agent to quote you coverage. The old adage: “Better safe than sorry” applies.

Additional Resources [+]
How Much Do Private Schools Cost?
How Much Do Private Schools Cost?
Understanding Private School Tuition
Understanding Private School Tuition
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