Parents can attest to the fact that there is always something new to teach kids, whether it's about table manners, how to change a tire, resolving a conflict with a friend, or how to save money. Although many parents see the benefits of teaching their kids about money at an early age, they do not always include lessons about the other kinds of financial responsibilities that come with adulthood, such as paying and filing taxes, buying or renting a place to live, or the importance of insurance.
As a result, many kids enter into adulthood without the first clue about how insurance works, why they need it, or the different types of coverage and terminology. In today's Aegis blog post, we'll look at the three basics parents should teach their kids about personal insurance coverage to help get them on a better foundation as adults.
How Insurance Works
While parents don't need to go into complex explanations and lectures on how insurance works, they should at least explain to their teenagers how insurance policies work and what they provide. Kids should understand that insurance provides financial support for events covered by their policy, and that having an insurance policy requires a premium payment to keep the coverage active. Parents can help reinforce the idea of insuring property by discussing what matters most to their kids and how insurance offers financial protection and peace of mind if those things are lost, stolen, or damaged.
Coverage Types and Terminology
Next, parents should explain the various types of personal insurance that they currently have, as well as the possible insurance policies their kids may need, as they get older. For example, a teenager should know that they are likely covered by their parents' auto insurance policy, health insurance policy, and life insurance policy. In addition, as they get older and move out, they will likely need Auto Insurance if they plan to drive, Renter's Insurance if they live in a college dorm or apartment, and Homeowners Insurance when they buy a home. Also, parents can also explain terms such as premiums, deductibles, exclusions, and endorsements so their kids aren't confused later when buying their own policies.
Why They Need It
Finally, it's important that parents communicate to their growing kids the importance of having quality personal insurance coverage through all stages of life. It can be a key time to share personal anecdotes of when insurance helped in the past, such as prior car accidents, personal injuries or health issues, or damages to a home or other personal property. In addition to providing financial assistance when needed and peace of mind, insurance coverage can also be required by state or federal laws, so compliance is necessary. For example, some kids might not realize that they will always need to have auto insurance coverage if they want to own and drive a car, based on state law.
While insurance talks might not be the most fun or exciting discussions to have with your kids, it's an important lesson that can benefit them for the rest of their lives, and it can help set them on a better path for the future. Aegis Insurance & Financial Services is pleased to offer individuals and families reliable, top quality Personal Insurance coverage at affordable rates. We offer a full range of Personal Insurance policies, such as Homeowners, Renter's, Auto, and Life Insurance. Contact our Aegis team today at 713-850-7622 to schedule a discussion about your family's insurance needs, or fill out our online form to request a free quote!