Insuring you can pay for school
PARENTS can now take out insurance to cover the cost of private school fees if they lose their job, have an accident or become seriously ill.
Sydney-based insurer QBE will today launch Australia’s first school fee insurance product in response to skyrocketing fees and private school enrolments.
About a third of NSW schoolchildren — 418,000 — attend a private school despite the enormous costs. New parents who plan on sending their child to a top private school from kindergarten to the HSC can expect to pay nearly $550,000, according to education investment fund service ASG. The average cost of private school fees has risen by 64 per cent in the past decade.
School fee insurance will be available to emergency services workers and manual workers typically excluded from income protection insurance because of the inherent danger of their jobs, according to QBE School Fee Protect Insurance founder Johnny Marchant.
“Until now, the only option for families in Australia to protect against the risk of defaulting on their school fees has been income protection insurance, which may have lengthy waiting periods and will adjust benefit payments should you receive other income,” Mr Marchant said.
However, the new policy will not cover anyone who is self-employed, works less than 20 hours a week or has a preexisting medical condition.
The cover would suit parents who scrimped and saved to send their kids to private schools, according to NSW Parents’ Council executive officer Stephen Grieve.
But leading consumer lawyers have warned many parents would be better off relying on income protection insurance, which comes standard with most super.
And Sydney Catholic Schools executive director Dr Dan White said parents of the 70,000 kids at any of the 152 low-fee systemic Catholic schools in Sydney should not take out this insurance because parents in financial hardship could apply for fee relief.