Teaching Kids the Value of Insurance

When teaching kids about finance, parents should remember that insurance is a valuable part of anyone’s financial portfolio and is a concept that children can find difficult to understand. For a few tips to teach your children about the purpose and value of insurance, read on.

• Explain to your children how insurance works. Insurance is meant to make a policyholder whole after they suffer a loss caused by an unexpected peril. Helping your children understand that insurance works to protect the value of their stuff is a great place to start your lessons.
• Give them an example. If your children get allowances or birthday money and they’ve bought a toy or other item with the proceeds, use this situation to create an example of the benefit of insurance. Remind them about how long it took them to get the money to buy the item and ask them how they would replace it if it was damaged in a fire. Then, explain how an insurance policy could provide benefits that would allow them the resources to replace it.
• Discuss the different types of insurance available, the assets each line protects and benefits they provide. From health insurance to life insurance, property insurance to auto insurance, there are many different products that your children should learn about.
• Read the policies with them. If your kids are old enough to understand the nuances of an insurance policy, sit and read your policies with them. Not all at once—that’s a recipe for attention span disaster. But try to make it a fun event to read policies together once a week over a pizza and some music. This will help your children understand what to expect from insurance coverage, help them develop critical thinking skills and can open up the lines of communication for questions.
• Explain the consequences of being uninsured. Don’t be afraid to discuss with your children the consequences of not having insurance coverage. Use your own home and assets as an example. Let them know just how much it would take to rebuild and refurnish your home after a disaster and explain how insurance can make the seemingly impossible, possible.

For more resources and ideas about teaching your children about Oklahoma City Insurance, give us a call at Alexander & Strunk Insurance or stop by today.