For most Americans, it’s typical to get insurance in case something catastrophic happens that ruins a car, damages a house or requires a massive medical bill.

Though less popular, insurance is also available for paying for college. Tuition insurance is a paid option available to students to protect investment in case they have to withdraw from college due to illness or injury.

Most schools offer a refund policy for students who are unable to finish a semester due to an illness, accident or mental health crisis. Syracuse University’s refund policy, which can be found on the bursar’s office website, states that the school will refund 100 percent of tuition and fees to students who withdraw for any reason before the financial drop deadline.

But if a student withdraws after 60 percent of the semester has been completed, he or she will only receive a 40 percent refund, though students who withdraw for medical reasons may receive a special refund on tuition.

Tuition insurance is intended to fill any gaps in the university’s refund policy, said David Levy, editor of the college planning website Edvisors.com.

The general idea, Levy said, is that if a student must withdraw from school before the end of the semester due to a serious illness, injury or mental health crisis, the insurance company will refund whatever part of his or her tuition, fees and room and board the university does not cover.

Premiums are calculated as a percentage of the amount a student is paying to the university, and generally range in price from $100-$1,000 per semester, depending on the school and the insurance plan, Levy said.

The website of A.W.G. Dewar, Inc., a major tuition insurance provider, stipulates that to file a claim, a withdrawing student must have his or her illness or injury certified by a medical professional and must not receive any academic credit for the term. Additionally, only some mental health issues are covered.

Levy also cautioned that a typical tuition insurance plan does not protect students who leave college mid-semester due to poor grades, financial difficulties, substance abuse-related problems or intentionally self-inflicted injury or illness.

Tuition insurance may provide peace of mind for students, especially those who are enrolled in private colleges or universities and who are paying a substantial proportion of their own tuition and those with preexisting conditions that put them at greater risk of leaving school early, said Catherine Alford, a financial expert and spokeswoman for Allianz, another major tuition insurance company.

“(College is) one of the biggest expenses you will ever have in your life,” Alford said. “My advice would be, absolutely (purchase the insurance).”

But Levy said tuition insurance is not always a good idea, adding that purchasing it “may not be financially worthwhile,” especially for students whose schools already provide sizeable reimbursements for students who withdraw. He said many tuition insurance plans do not cover 100 percent of the total expenses for the semester in the event of an early withdrawal.

Students who are considering tuition insurance should look carefully at what each policy covers and what the restrictions are on claims, in addition to examining their own school’s refund policies before making a decision, Levy said.

“(Students and their families) should shop very carefully and make sure they’re getting the protection they need,” Levy said.

Published on August 28, 2016 at 8:32 pm

Contact Madeleine: mdavison@syr.edu