We know life is full of uncertainties. Nobody is ever immune to experiencing financial hardship at some point in life, and usually when you least expect it. What you can control and prepare for, is how prepared and well covered your family is. Family insurance is one of the best ways to protect the future of your family. It’s also a means of providing you with the extra funds you may need when times get tough, that allow life to go on and people to recover if need be. As adults we understand the importance of family insurance, but how do we start teaching these concepts to our children?
Your children should know about the necessity of planning. Being able to save the right amount of money to survive unexpected times and how insurance plans help you do so is valuable information, especially for teens and young adults who will have to organise these things for themselves sooner rather than later. For a start, you can teach them about the different factors and events that may cause them to need to apply for cover or lodge a claim. Ask them to consider what they would do in these moments of distress.
Show your children that there are different types of insurance plans for different people and different circumstances. Moreover, tell them how you cover allows you to save money and pay installments of to your plans. Explain to them your duties when applying and paying for cover as well as the responsibilities held by the cover provider to help you in times of need.
For younger children, you can make learning about insurance as a means of managing your finances into something fun and engaging. You can explain the working of insurance policies by giving your kids fake money and letting them divide it into different sets. Now allow them to budget their expenses including the premiums of different insurance plans. Repeat the process several times and then pretend that due to a catastrophic event they have lost money or their expenses have become higher than their income. Now refer to the portion of the money paid as premium and show them how it will cover the additional expenses.
Don’t forget to touch on the pros and cons of different insurance plans and providers. Teach your kids the importance of doing research or seeking advice before purchasing. Show them where this information is accessible and let them see what they can find.
Try to discuss different insurance plans you have signed up for and how you are managing to pay the installments of these plans too. Show them the things that are insured under various types of cover. Your home, its contents, your car, and all of your family members. Teach them how insurance looks after their futures by providing a way to manage money and quality of life when it becomes hard to control. You can also discuss why you chose the plans you have and why you have selected a specific company for the plan so they can better understand how to make these decisions for themselves.
Just like insurance cover aims to protect you and your loved ones with a plan, teaching your kids about insurance sets them up with a plan for their future. The more they know the more they will be inclined to look after their own insurance when the time comes.