Life insurance

What if something happened to you or your spouse? How will your children ever afford to stay in college?

If you're paying for your children's education, and you want to make sure the money tree won't die with you, review your financial situation. You might already have a sufficient amount of money in savings or other assets. Make sure you have the cost of tuition and living expenses covered.

If you don't, consider buying a second life insurance policy, adding to the policy you already have, or buying a term life insurance policy for the duration of your child's college education.

You'll need to take into account a variety of factors:

• How much does tuition cost?
• How much does room and board cost?
• How much does transportation cost?
• What other college expenses will your child have, such as books and supplies?
• Is your child on financial aid or does he have a scholarship?
• How much do you have saved?

Property insurance

Your daughter intends to study mechanical engineering at college and definitely needs a laptop, so you buy her a state-of-the-art computer.

Now what?

Check out buying property insurance for your daughter or add more to you own home insurance coverage. While crime isn't necessarily rampant on college campuses, it's not rare either. The Independent Insurance Agents of America, a trade group, says that more than 100,000 property crimes occur on campuses each year, and that the average amount stolen is valued at $1,250.

Your home insurance policy generally provides coverage for your children's belongings only up to 10 percent of your contents coverage limit. Thus, if your policy has a contents-coverage limit of $25,000, your children are protected only up to $2,500. This might not be enough to replace even the laptop.

To cover laptops, stereos, televisions, and other expensive items, your college student might need supplemental property insurance. That can be achieved by having them buy their own renters insurance or increasing the limits on your homeowner's policy.

Bill Wilson, director of the IIAA's Virtual University, says the standard home insurance policy covers students enrolled full-time in school and who resided in your household before moving to attend school, provided the student is under the age of 24 and your relative, or is age 21 and in your care. This policy would cover your child whether they live in a dorm or in an off-campus apartment. It is possible that language in your specific home insurance policy could contradict this, Wilson says, so it's important to review the language of any policy to determine if there is coverage for the student's living space.

Children can also buy their own renters insurance policy, and it can be affordable, even on a college student budget. A standard renters policy with $15,000 in personal property coverage and $100,000 to $300,000 in personal liability coverage can cost just $100 to $150 annually. Does your child have a roommate? Some insurers will let them share a policy — and the premiums. Take a detailed inventory of your children's belongings to estimate how much coverage is needed. For more details about coverage and exclusions, read The basics of renters insurance. Return to page 1