School fee insurance
You can protect your child's education if you become unemployed.
If you send your child to a fee-paying school, school fee insurance can help if something goes wrong and you find yourself out of a job. By paying your child's school fees, it can give you peace of mind and time to get back on your feet.
What is school fee insurance?
School fee insurance is specifically designed to protect your child's education if they attend a fee-paying school. If you cannot pay your child's private school fees because of involuntary unemployment, illness or injury, school fee insurance cover will pay the school fees for you. It usually covers you for up to 6 months worth of fees for involuntary unemployment and 12 months for disability cover.
How does school fee insurance work?
In exchange for a monthly or annual fee, school fee insurance will pay your child's private school fees in the event that you become involuntarily unemployed, or ill or injured and cannot continue to work. Your premium will be calculated depending on several factors such as the annual school fee and the number of children you're insuring. However, it does not take your income or profession into account and there are generally no waiting periods.
School fee insurance essentially protects your child's education. If you suddenly have to look for a new job, or need to recover from serious illness or injury before returning to work, school fee insurance ensures your child's school fees are paid for.
School fee insurance is generally broken down into two parts: disability cover and involuntary unemployment cover. Disability cover generally covers you for up to 12 monthly payments while you remain disabled. Involuntary unemployment cover will pay for a maximum of six months during any consecutive 12-month period. Plus, if your child has been continuously insured since year 7, insurers such as QBE will increase the benefit an extra month for every year that you have school fee insurance.
What's not covered?
Keep in mind that like most types of insurance, there are limits to each policy benefit. That means if you don't adequately insure yourself, you will probably have to cover the uninsured portion of any loss yourself. In most circumstances, you usually won't be covered within the first 30 days of the date you took out the policy. There is also ordinarily no cover for the first 14 consecutive days.
It's also worth noting that you won't be covered for voluntary unemployment – that is, if you quit your job. Seasonal or casual jobs are also not eligible.
School fee insurance vs income protection
If you've paid off all your other debts, like a mortgage, and your partner can pay for living costs, school fee insurance is generally more affordable than income protection. That's because with school fee insurance, you're only buying protection for one expense: school fees.
Income protection insurance, on the other hand, covers you for a lot more. If you rely on your income to pay bills, including your child's school fees, and put food on the table, you probably want to go for income protection insurance.
However, in some instances income protection insurance excludes people from cover depending on their profession so if you have had difficulty taking out income insurance, school fee protection insurance is a viable alternative. It generally doesn't take your income into account either and there are usually no significant waiting periods.
Who offers school fee insurance in Australia?
QBE is the only underwriter to currently offer school fee insurance. This means that all insurers currently offering school fee insurance will be very similar, if not the same. QBE insurance group is Australasia's largest international insurance and reinsurance group, with offices in 37 countries and over 14,000 employees.
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