07 Jun My kid is going to college. Should I buy tuition insurance?

Q. My daughter is going to college in September and we just got an offer for tuition insurance. Should we get it? How does it work?

— Mom

A. Congratulations to your daughter for having her college plans ready.

Here’s what you should consider.

Tuition insurance is just like any other insurance that you might have, such as car or auto insurance, said Jim McCarthy, a certified financial planner with Directional Wealth Management in Rockaway.

It will protect the asset if a qualifying event were to happen to it, he said.

“In this case, college tuition is the asset being protected and generally speaking colleges don’t have a 100% refund policy if you are unable to attend college,” he said.

Tuition insurance will cover the cost of tuition if the student is unable to attend college due to a qualifying event, which should be stated on the insurance policy, he said.

“On average the cost of the premium is from $300 to $500 per semester,” he said. “If you have reason to believe that your daughter might have to withdraw, it might make sense to have tuition insurance.”

But, he said, make sure you read the requirements for the insurance to pay out if a qualifying event were to happen.

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This story was originally published on June 7, 2023.

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.