With four years of college tuition costing as much as a Lexus, there’s now the option to insure your college payments much as you would a car or any other costly item.
Allianz Global Assistance (AGA) now offers Allianz Tuition Insurance so you get most of your money back if your student drops out of college due to an illness or accident.
“College tuition is one of those areas where they ask you for thousands of dollars up front but with no safeguard should anything go wrong,” says Daniel Durazo, director of communications at AGA.
The company offers three plan levels: the Essential plan for $29.95 per term; the Preferred plan, which costs 1.35 percent of the total cost of non-refundable tuition, fees, room and board; and the Advantage plan for 6 percent of same. Covered reasons include illness or injury to the student, death and psychological disorders. The Essential plan pays out up to $2,500 per term, while the Preferred and Advantage plans pay out 100 percent of the tuition cost and adds the broad category of “any unforeseen reason,” which is usually some sort of family crisis.
With college costs rising, it makes sense for parents to be worried. The stats are familiar enough — non-refundable tuition, fees, and room and board at a public four-year college now cost, on average, $19,000 a year. For a private school, it’s more like $42,000.
But amazingly, only 32 percent of students will graduate in four years, with only 55 percent graduating in six years, according to Durazo. Some students take breaks to work, while many others become sick or waylaid.
If you’re not sure if your child is adjusting to college, the insurance can serve as a safety net. Additionally, common illnesses that can knock someone back a term, like mononucleosis, flu and depression, are covered. Students at any accredited college, including trade schools, are eligible.
Plans are now available in 27 states, and the company expects them to be available in all 50 states by the end of 2016.
As for Durazo, whose son is at William & Mary in Virginia, he settled on the Preferred plan.
“You have to protect your investment and your child’s education,” he says.
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