As we raise children we teach them the importance of having good manners, and having good work ethics. We teach them to save money for a rainy day, and we teach them to protect their credit by paying their bills on time, and being true to their word. We also need to teach them the importance of having insurance coverage–talk to them about life insurance.
Auto insurance coverage is something that most young people realize that they have to have. They know that the law mandates that any car being driven on the highway must have enough insurance coverage on it to pay for any damages that may incur during an accident. You do not have to teach them that they need this type of insurance, but you may need to teach them about the different types of auto coverage that is available, and why they would need each different kind.
Life insurance is something that young people do not think about. When we are young we think of ourselves as invincible and immune to death. It can be very hard to teach children the reasons why they need to have life insurance coverage. You can explain to the child what the insurance covers including funeral costs, future education of children and grandkids, the cost of a home or a business and any other items and needs you feel will make your point.
Another topic that is often forgotten is long term care insurance and sadly, it is something that few people actually consider until it is too late. To teach your child about long term care insurance you can use a family member that needs the assistance of a health care team to do their daily activities and take care of their ailments. You can show the child how useful it is to have people help the incapacitated family member with the cooking, cleaning and dressing. Show them how much all these services actually cost by talking to the representative of the agency that provides your family member’s care and show your child how expensive this type of help is.
The importance of starting a conversation with your children about insurance cannot be overstated. Illustrate scenarios of families coping with and without insurance, whether it be affording the funeral, paying for LTC, or replacing the lost income if somebody in the immediate family passes away suddenly. After a serious discussion like this, it will not take long for them to see the importance of having insurance coverage.
As they grow older, hopefully these lessons will stay with them. When they exit college and start their careers they can get a $500k policy for around $20/month*. The cost is minimal and the piece of mind it provides as they set off in building their lives it priceless. Start early, insurance will likely never become cheaper and they can always buy more or cancel any coverage they don’t need. Talk to them about life insurance early to protect them later.
*25 yr old male in good health