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Review life insurance policies to be certain that your level of protection is adequate to cover college expenses for your children.
Some Questions and Considerations:
Determine if new levels of protection are required, and if so for how long? Here it would be advisable to sit down with both your financial advisor and insurance agent to see if your financial responsibilities and desires would be met should you die. If you foresee a shortfall in coverage, you may want to identify cost-effective ways to cover these new and most likely temporary expenses. You should consider buying a second life-insurance policy, adding to the policy you already have or, buying some term life insurance for the duration of time in which you will have children in college. Make sure that you factor in the cost of college for all of your children with a college cost inflation rate of 4% to 5% per year. At a minimum, factor in at least the tuition expense when determining your new levels of protection during your children’s college years. Tuition in the 1999–2000 academic year was: $ 1,627 at 2-year public; $ 7,182 at 2-year private; $ 3.356 at 4-year public; and $15,380 at 4-year private institutions. If your children are using educational loans, you should decide if you want additional coverage to pay off these debts. You may wish to use the Education Resource Center, “Seven Step Approach to Paying For
College.” This quick financial estimator will help you get a handle on what your paying for college needs will be.
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Evaluate your child’s needs
to determine if they require life insurance.
Some Questions and Considerations:
Typically, college students are not the primary provider for the family. Therefore, most parents often take out life insurance policies on their children in order to cover burial expenses, but college students probably do not need their own life insurance policy. However, if the student has a spouse, children or other dependent responsibilities then he or she should have adequate life insurance to provide support for the remaining period of dependency. Here a parent, working with the family’s insurance agent and financial advisor should work to educate and advise the college student child on the selection and amounts of coverage.
Some Questions and Considerations:
Does your homeowner’s insurance provide coverage for personal property in the dorm, such as computers, TVs and stereo’s? Generally, homeowner’s policies provide coverage for your children's belongings only up to 10% of the contents-coverage limit. If your policy has a contents coverage limit of $25,000, your children are protected only up to $2,500.
Before packing up everything in the van for the journey to campus, take an inventory of the “stuff” your college student is taking to school; laptop computer, VCR, TV, DVD player, clothes, furnishings, electronic equipment, microwave, boom box, cell phone, etc. Next place a dollar value next to the items. Now that you are thinking about it, jot down the serial numbers and engrave your kid’s initials or last four numbers of their social security number on the “stuff” that’s heading off to college. This will give you an idea of how valuable your kid’s stuff is and also provide you with documentation of ownership in case the stuff is ever lost, stolen or recovered. The inventory will give you an accurate estimate of what is owned and how much coverage you may need.
To cover laptops (which are especially vulnerable to theft), stereos, televisions and other expensive items, your college student may need supplemental property insurance. Students can purchase their own renter's insurance or the parent can increase the limits on their homeowner's policy. You should note that your homeowner insurer may suspend coverage for theft at a student's residence if the student has been away from their
off-campus housing (dormitory or apartment) for more than 45 days. Furthermore, if your child rents an apartment off-campus, and doesn't live in university-owned housing, he or she may not be covered under your homeowner’s policy at all.
Is your college student taking his or her pet to school? Many insurers aren't keen on dogs. In addition, pets often require veterinarian care. In this case, it would be worthwhile to obtain Pet Insurance in order to provide coverage for your son’s or daughter’s cat or dog.
To avoid these problems, have your college student children obtain their own renter's insurance or dorm insurance policy (of course you can pay for it!). Renter’s insurance protects your college student from liability claims if someone was injured on the property they are renting. Obtaining personal property insurance for the “stuff” that goes to college with your son or daughter should be a priority and purchased before your student moves into their college quarters. Make sure that you regularly update the stuff that is added during the year.
Dorm insurance has been designed specifically to address the needs of college students and is inexpensive. Dorm insurance can be
obtained via the Education Resource Center with deductible of $50.00, $75.00 or $100.00. Covered amounts are available in $500 increments starting at $2,000 with a premium of under $30.
This insurance covers against all risk of direct physical loss resulting from: fire, theft, lightning, vandalism, and windstorm when located: within the student’s dorm or apartment, on campus within a locker, within the student’s automobile or while in transit by carrier for hire.
The appropriate renter's insurance will protect your children from property and liability problems. Renter's insurance can be affordable. A standard renter's policy, with $15,000 in personal property coverage and $100,000 to $300,000 in personal liability coverage, cost around $150 annually. Some insurers will let roommates share a policy and the premiums.
The Education Resource Center has partnered with some of the industry’s leading insurance providers to offer you
access to a variety of insurance products for college students, recent graduates and their families:
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