Your teenager… and their insurance: 4 ways to cover the basics
By Ronen Goldman, Director of Marketing & Customer Relations, Goldfus Insurance
Teenagers and insurance? Of course they go together! There are four areas to consider as you watch your child’s transition to adulthood.
- Car insurance: Welcome to teenagehood! Once your children creep closer to 16 years of age, you will probably hear an ongoing chorus of, “When can I start driving lessons? Will you let me drive? Can you buy me a car?”
The reality check hits and you begin to realize the enormous responsibility of teaching road safety, the need to share your car, and of course, the significant dent in your wallet created by car insurance.
Depending on the car you already own, it is not always worth adding your teenage child to your car insurance policy. Consider the following options:
- Buy an older car with 3rd party insurance for young drivers (keep in mind that there are pros and cons when considering this options, such as safety features of an older car, etc)
- Purchase a car insurance policy providing cover for your teen for a pre-determined number of hours which can be activated via a smartphone app.
- Bite the bullet and pay the extra premium to have them fully insured on your current vehicle.
- Home insurance: Whether messaging on Facebook to ask about homework, texting their mothers how much they love them or scrolling through facts about robotic engineering, teens are mostly facedown in their smartphones.
Let’s face it: portable gadgets are a significant (and daily) part of a teenager’s life. They take these devices everywhere and enable easy communication with family and friends.
As a result, it is important that these items be insured correctly and appropriately, both inside and out of the home. Check your home and contents insurance policy to make sure that all smartphones, laptops, tablets and other portable devices are adequately insured on an “all risk” basis.
- Health insurance: While they may still seem like young children in your eyes, very soon your teens will become legal adults. For children below the age of 17, some insurance companies offer private health plans at fixed premiums for the lifespan of the policy. By entering teens into the fixed premium plans while still eligible, they will be paying significantly less than their peers as they get older, amounting to savings of hundreds of shekel a month, the older they become.
- Savings & Investments (the ‘babysitting’ fund): As our children grow older, they take on more responsibility and often transition from the babysat to the babysitter. For some kids, it is a way to make a little cash for when they next visit the mall, but for many it is also the beginning of an education in financial responsibility.
The best way for parents to educate their children is to provide them with the tools to understand firsthand what the differences are between the various savings options available and the benefits to having a savings account at all.
Banks offer savings plans, but often in order to receive a semi attractive interest rate they may stipulate that the money be locked away for a predetermined number of months. As an alternative, insurance companies and investment houses offer investment tracks that allow for more attractive interest rates that historically have outperformed the banks, without the need to lock the money in for a predetermined length of time.
When considering the options for insurance, invite your teen to join you in the decision making process so together you can assess the benefits and risks of investment tracks.
For more information about the insurance and investment options mentioned in the article, contact us today!