Should you insure your kids?

By: Mat Sturge

When you think of all things financial, insurance is probably one of the least exciting of them all (after credit card debt perhaps), but it is more important than you might think. Kiwis are starting to understand insurance better, but it blows my mind that our children are still being left out of this equation.

I don’t mean that children aren’t being educated about insurance. I mean that a number of parents and advisers do not understand the potential financial consequences of our children becoming ill.

Some of you may recall my efforts last year to raise money for my friends’ child Celeste who had leukaemia. In fact, hundreds of you helped and thousands sent messages of support, so thank you again for that. We gave the family $4000 but that was a drop in the bucket compared with the costs they incurred.

If your child became seriously ill, you’d probably do exactly what Celeste’s parents did. They dropped everything in their lives to be beside her, desperately trying to heal her but also making sure that she was as happy as humanly possible. No amount of money could ever make up for their loss or suffering but running out of money in this position is not going to help either.

Amazingly, one of the best protective measures is also one of the lowest cost forms of insurance I know of. It’s called Terminal Illness Cover and for 99 cents per week you can cover a child for $500,000. With this kind of money paid out upon diagnosis of a terminal illness, a family could afford to drop everything, bring in additional support, pay for private treatments and very importantly, spend time with the children creating a happy and positive environment that at best helps them heal and at worst makes their last days as happy and pleasurable as possible.

As a parent I don’t like to think about this stuff either. As a financial adviser I understand the practicality of it all, and as a friend to someone who lost their little girl I just can’t stress enough the importance of thinking these things through.

Making the decision about whether or not to insure our children is about being prepared and thinking about how best to provide ourselves with the resources to help them as best we can when they need us the most.

Most of us insure our homes and cars and many of us have life insurance, with increasing numbers showing the desire to protect their health and incomes. However, it’s time for us to start considering protecting our children with insurance. They’re the cheapest to insure and yet the most precious of all.

The opinions and information expressed above are not a financial recommendation. Contact a financial adviser for written recommendations that are suited to your personal situation.


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