Cover for students forced to quit early

An insurance policy covering students against the potentially astronomical costs of leaving university prematurely will be launched next week.

An insurance policy covering students against the potentially astronomical costs of leaving university prematurely will be launched next week.

It promises to pay out a fixed sum for each completed term or part-term, for students who are unexpectedly unable to complete their studies.

The Studentguard policy, devised by Pavilion Insurance Network, will be available over the internet from Monday ( www.studentguard.co.uk) or on the phone, and is one of the UK's first products to insure students against the possibility of having to cut their studies short.

The three levels of cover - gold, silver and bronze - will cost a single premium of £399, £299 and £199 respectively, and promise to pay out either £2,000, £1,500 or £1,000 for each term, or part-term, completed by the student at the time they terminate their studies.

Pavilion says the launch was inspired by the soaring costs of higher education, which can leave students heavily in debt, and with no income, when they are forced to terminate their studies early due to illness or accident.

The policy will also be targeted at parents who have provided money to fund their children's higher education. The policy promises to pay out on the death of a child, as well as in the incident of accident or illness.

Andrew Selby, chairman and chief executive of Pavilion, said: "According to the University and College Admission Service there are over 300,000 new students entering university each year, with many of them leaving university with debts over £10,000.

"Studentguard fees cover is providing an insurance-based parachute if, due to reasons beyond their control, they are unable to finish their degree."

The Higher Education Funding Council says more than a fifth of students fail to complete their degree. However, the policy will not cover those who voluntarily drop out, or who stop due to stress, anxiety, depression or pregnancy.