- What Kind of Insurance Do I Need in College?
- June 24, 2015
A student heading off to college is an extremely rewarding experience. A young adult is going out into the world to take those bold steps to build an independent life. For parents, it is marked by feelings of pride in their children as well as anxiety for them.
Choosing adequate health coverage could be one of the most important decisions parents of the college-bound make. If there is an accident or serious illness, the medical bills for an uninsured child could be exorbitant and cause huge financial setbacks.
According to Aetna, college students can rely on their parents’ coverage or purchase their own-school-sponsored coverage. Employer-sponsored plans historically have had age-based cut-offs for dependents, but following the passing of the Patient Protection and Affordable Care Act, health insurers are now required to extend coverage to young adults under their parents’ policy until the age of 26. Also, students no longer have to live in the household, attend college, be married or listed as dependent on their parent’s tax return. However, if you have an HMO, keep in mind that if your child is going to school out of state, they will no longer be in the network of healthcare providers. This means any treatment they receive will have to come out-of-pocket and that can be expensive.
Some insurance companies offer health coverage specifically for college students. BlueCross BlueShield Association, for example, recently launched the Independence Blue Cross Student PPO Plan in colleges across southeastern Pennsylvania. The plan provides affordable and comprehensive healthcare coverage for college students.
Another question a student needs to consider is how will he actually get to college? And once he is there, how is he going to get around? He may need a car. That means auto insurance.
According to the Insurance Information Institute, many students are typically covered under their parent’s auto insurance policy, provided their primary address is the same as their parents. If the student is driving the car at school, the rates may change. For example, a discount is often available if the college they attend is more than 100 miles away. Also, if the title of your car is transferred over to your child, they can no longer be insured under your auto insurance policy and will have to purchase their own.
“You’d need to talk to your agent or insurance company representative to get definitive information on premium rates,” said Michael Barry, spokesperson for the III.
Cliston Brown, Director, Public Affairs, Property Casualty Insurers Association of America, agreed, “The best course of action is to talk to your insurance company. Make sure your adult child is properly covered, and get the benefit of any discounts.”
A new student has more than a car to protect, however. It may be in his or her best interest to obtain a renters policy, especially if there are valuable items around such as a laptop or bicycle. For example, if a student furnishes her own apartment and has electronic equipment, the 10 percent limit provided by her parents’ homeowners’ policy may leave her uninsured. Still, you always have the option of getting a personal property endorsement added to your policy to cover your child’s belongings.
If you have not updated your life insurance policy in awhile, it might be a good idea to modify the coverage amounts to account for your child’s tuition. Also, your child may want to purchase a low cost term life policy that would cover basic costs such as funeral expenses. While debt from a federal school loan is forgiven if the student dies, a private loan may not have the same provisions. It is best to check with the lender to learn if they have debt cancellation. If they do not, a student can purchase more coverage on a term policy to cover the loan in the event the unthinkable happens.
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