Wednesday, August 6, 2014
Tuition fees rival mortgages for the largest investment many people will ever make, yet few realise that insurance is available to protect that investment should unforeseen circumstances arise that interrupt a student's course of study.
How does Tuition Insurance Work?
While it is becoming common for American students to purchase policies directly from insurance companies, Canadian students normally buy the policies through their institutions as a portion of their registration fees. Some institutions offer it as an optional registration add-on for a relatively high premium, while others charge it automatically to all registered students to spread the insurance risk over a larger population and secure a lower premium.
At independent schools and private colleges with fees of up to $40,000 per year, it normally costs between $300 and $800, or between one and two per cent of fees, depending on whether the student is boarded on site (Belford, 2010).
Since tuition insurance is still a relatively new type of specialised insurance in Canada, the possibilities have not yet been tested. Parents with children at non-participating institutions may have to approach brokers and underwriters to inquire if they can purchase individual policies.
Who Qualifies for Tuition Insurance?
- Students enrolled in participating schools, colleges and universities.
- All students at expensive institutions, including those at primary, secondary and tertiary levels.
- Students who withdraw because of medical emergencies, such as illness, accident, serious psychological conditions, and so on.
- Students who have to withdraw because of unforeseen non-medical circumstances, such as a family's relocation, financial hardship, loss of income, a close relative's death, and so forth.
It usually excludes students suspended for disciplinary reasons, and an interruption in classes because of war, riots, pregnancy, attempted suicide of self-harm, and drug use. Most policies also exclude pre-existing medical conditions. (Appleby College, 2014; Hillfield Strathallan College, 2013; St. Michaels University School, 2014; Strathcona-Tweedsmuir School, 2014)
Who Provides Tuition Insurance?
Hundreds of independent schools and colleges provide tuition insurance. Without a specific inquiry, it is difficult to determine which institutions subscribe to such an insurance plan, as they normally white label it (market it under their institution's name).
Since it is rare for Canadians to purchase individual tuition insurance plans directly, insurers market these plans to institutions, not to individuals. The US company, A.W.G. Dewar, underwrites policies in both the United States and Canada (Leahurst College, 2014). Aviva Insurance Company of Canada underwrites policies for some institutions (Appleby College, 2014). Canada Underwriter, the insurance magazine, includes Burns and Wilcox Canada Inc., Approved Surety Company, CFSU, Sutton Special Risk, and Trans Canada Insurance Marketing in its list of Canadian underwriters of tuition insurance (Canadian Underwriter, 2014). Toronto insurance brokerage, L.J. Gosselin & Associates, sells most of these policies to institutions (Brent, 2010).
Appleby College. (2014). Tuition Refund Insurance. Retrieved June 13, 2014, from http://www.appleby.on.ca/uploaded/Assets/Registration/Registration_Documents/Tuition_Refund_Insurance.pdf
Belford, Terrence. (2010). Private School: Consider Tuition Insurance. Retrieved June 13, 2014, from http://www.theglobeandmail.com/news/national/education/private-school-consider-tuition-insurance/article599909/
Brent, Paul. (2010). Schools Offering Tuition Insurance. Retrieved June 13, 2014, from http://www.nationalpost.com/news/canada/toronto/private- school/Schools+offering+tuition+insurance/3610446/story.html
Canadian Underwriter. (2014). Group: Private School Tuition Fee. Retrieved June 13, 2014, from http://www.canadianunderwriter.ca/esource/search.aspx?stype=3&svalue=4321509&er=NA
Hillfield Strathallan College. (2013). Enrolment Information. Retrieved June 13, 2014, from http://www.hsc.on.ca/document.doc?id=31
Leahurst College. (2014). Fees and Financial Assistance. Retrieved June 13, 2014, from http://www.leahurstcollege.ca/admission/fees-and-financial-assistance
St. Michaels University School. (2014). The Tuition Refund Plan. Retrieved June 13, 2014, from http://www.smus.ca/admissions/tuition-refund
Strathcona-Tweedsmuir School. (2014). Tuition. Retrieved June 13, 2014, from http://www.sts.ab.ca/admissions/tuition