Schooling takes insurance priority

Despite being under insured in many areas, a review of personal insurance plans has found the cost of private school education for dependants is one item many families are treating as a priority when taking out insurance cover.

Risk outsourcing firm Risk Easy reviewed the personal insurance plans of 50 families with dependants and found insuring for significant educational costs in the future was a key factor that alerts them to the need of taking out personal insurance.

Risk Easy chief executive Shaun Williams said: “Of the plans reviewed, 98 per cent have adequately covered private school education costs.

“Clients tell our consultants that education costs would be the last personal insurance option that they would give up. For families with dependents, we believe that insuring private education costs comes close to covering the mortgage,” he explained.

The review revealed the 50 participating families had an average annual income of $125,000 and had taken out an average level of cover for their children’s education of $148,000.

Williams considered this level of cover to be adequate on average, as many people did not actually apply for this type of insurance until their children had actually started going to school.

According to Risk Easy, parents will need to allow for an expense of $230,000 for fees and an additional $40,000 for ancillary items such as uniforms and computers for each child for whom they are intending to provide a secondary education at a private school.

“Many parents routinely under-estimate the financial outlay of an independent education. In fact, some parents don’t know what the costs are until they experience them,” Williams said.