What is education insurance and why you need it

In today’s economy, it’s more important than ever to ensure that you have an education that leads to a lucrative career and provides you with the freedom to do what you want when you want. That way, you can enjoy all the nice things in life like vacations, nice cars, beautiful homes and plenty of cash in your pocket at the end of each month. Unfortunately, with the rising cost of college tuition, getting your degree can be tough if you don’t already have some money saved up or you don’t get enough financial aid from the government and/or grants to cover tuition costs.

Why do I need education insurance?

An often overlooked area of financial planning, education insurance provides protection in case of a career interruption. Unexpected life events, such as illness or injury, can lead to losing your job. This can have a devastating impact on finances if there are no safeguards in place. Education insurance can be helpful for students looking for ways to pay for their studies as well as those who have already graduated with loans but may not be able to get back into paid employment right away.

Types of Education Insurance

There are two main types of education insurances, school cancellation insurance and loan repayment insurance. School cancellation coverage protects students from being forced to leave college because of an illness or accident that leaves them unable to continue their studies. Loan repayment coverage repays up to 100% of a student’s eligible loans if they die while in school. Both types can be applied toward covering any post-secondary costs such as tuition, books, fees, housing or other expenses.

Selecting an Education Insurance Policy

The main reason most people get educational insurance is that they are paying for an expensive degree. If you’re going to school and taking out loans, these debts are often deferred until after you finish your education. However, if something happens along the way—if you lose your job or have a medical emergency—your student loans could be called in immediately.

How Does My Child Benefit From an Education Insurance Policy?

There are many things to consider before purchasing an education policy. First, how much will it cost? Second, how long do I have until my child can start applying for scholarships or student loans? What about financial aid? And what’s in a policy anyway? To answer these questions, we’ve developed a chart comparing some of our most popular policies. We hope that as you examine your options for coverage that you also find our chart helpful in identifying which features best serve your needs.

How Can I Pay For School If My Child Has an Education Insurance Policy?

Education Insurance (EI) policies are meant to help families pay for higher education when money gets tight. But there’s a whole lot of confusion about what EI does—and doesn’t—cover. And what happens if your child is injured or gets sick? Does your child have to pay back EI? We answer all of your questions right here.

Is There a Difference Between Life, Critical Illness, and Accident Coverage?

While life, critical illness, and accident coverage are often lumped together as insurance for education, there are some subtle differences between these policies. How do you decide which kind of coverage to buy? We explore how each one works in our comprehensive guide. You’ll learn how to get educated on your options so that you can select a policy that suits your specific needs.

Is An EDU Policy Taxable As Income?

It depends on what type of policy you’re under. A payment made by your employer to an educational assistance provider isn’t taxable if you are using that money for courses, supplies, or other training materials related to your work. If you are attending a qualifying school on a full-time basis (at least as determined by your employer), then payments made to a qualified institution or program aren’t taxable either. You can also exclude payments for tuition, fees, books, supplies, equipment, and other necessary expenses paid directly to an eligible school as long as they don’t exceed $5,250 per year.

Is an Education Insured Premium Deductible as a Business Expense?

Well, sort of. You can deduct up to $4,000 in qualified higher-education expenses that were not paid by grants or scholarships (and are not reimbursed by your employer). Qualified higher-education expenses include tuition, fees, books, supplies and equipment required for enrollment or attendance at an eligible educational institution. For more information regarding what items qualify as a qualified higher-education expense see IRS Publication 970 – Tax Benefits for Education. The maximum deduction is phased out based on adjusted gross income (AGI) between $80,000 and $90,000 ($160,000-$180,000 if married filing jointly). In addition to being able to claim your deduction on Form 1040 Schedule A line 23; you may also be able to take advantage of tax-free distributions from 529 college savings plans. These distributions do not affect eligibility for federal student aid since they do not represent taxable income.