by Russell Hutchinson
I’m not talking about young children, rather, children between the ages of 18 and whenever they finally launch into life on their own.
Maybe you debated hard whether to help buy your kids their first car. Parents make numerous compromises about this. I know one that pays for WOF, Rego and repairs, because they always want the car to be safe, but leaves the other stuff with the child to sort out. Another one adds them to their own insurance policy because it makes it cheaper for them. Some charge them, some don’t and so on.
Medical insurance is the first stop, and in among all the expenses of sending a child to University or other further education, many parents keep up medical coverage for their kids if they can afford to do so. Even this can be calibrated to be not such a burden. A measure of self-insurance may be applied. The most commonly selected excess level is now $500, and $1,000 is hardly a problem for many people when the item at stake is surgery that might cost $30,000, or drugs that might cost $100,000.
Few think of life insurance, trauma, or income protection. But the cover, at 18, is so cheap that if there is a little room in the budget for including this, I would argue strongly for it. The first reason is to inoculate your child against the kind of insurance sold alongside hire-purchase or lending. Young people often borrow: for appliances for a shared flat, for a car, for all sorts of things. With that loan someone will try to sell them some loan protection insurance. The second reason is that almost any coverage bought in that way will probably be very expensive, very poor coverage. Better than nothing, that’s true, but when better cover can be had for a lot less money, you’d be mad to settle for it. The last reason is that you will think of it, because you have probably seen more of life. They may not, because at 18, you think you’re bulletproof.
So, why not buy them a small, basic package of cover? Better yet, buy it on a level premium – see how low it is at 18 years old. Then they can reject all the proffered loan protection plans until they need quite a lot more cover. They can take over paying for the package when they leave university and get a job.
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