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5 things your parents inadvertently taught you about insurance

Tuesday, January 15, 2019

Parents are the soundest life coaches. They taught us to ride bikes and tie our shoelaces. They shared their knowledge of what is true and right (“treat others the way you want to be treated”). It was mostly mom and dad’s pearls of wisdom that guided us through the transition from child to young adult. Considering their influence, it’s not surprising that millennials still count on their parents for financial advice.

Insurance is something we usually don’t think about when we’re young. But it’s a reality many of us must face sooner or later as we become independent. Thankfully, we can bank on our parents’ advice to help us make smart choices and understand our responsibility as policyholders. Here are five things your parents inadvertently taught you that can be useful in understanding the ins and outs of insurance.

1. Fulfill your obligations

As children, we had certain responsibilities around the house as our contribution to keep the household running. If you promised Mom you’d clean your room, she expected you to stay true to your word. It works the same with insurance. When you sign on the dotted line to activate your policy, you are promising the insurer that you’ll pull your weight by keeping your information up-to-date and the insurer accepts that you will honour your obligation. It’s a bit laborious but read the terms and conditions of your policy so you know exactly what you are and aren’t covered for – this will help avoid any nasty surprises at claim stage.

2. Honesty is the best policy

That’s what you probably heard when Mom found out that the money you asked for books was spent at the tuck shop. Whenever our parents caught us in a lie, we usually walked away with a slap on the wrist. But our parents may be onto something: telling the truth is indeed the far better option than lying in most cases, especially when taking out an insurance policy. However small the lie, withholding or providing false information to your insurance can have detrimental effects as your policy may be cancelled and you may be prosecuted for fraud.

3. Look after your things

Our parents taught us valuable lessons in accountability so that we can understand the importance of taking care of our books, toys, clothes, school supplies and pets. As children, it was much easier to lose or break our personal belongings and it was up to our parents to replace these. Since we no longer rely on the bank of mom and dad, we are financially accountable for the things we lose or damage. Because life happens, the best way to look after your possessions is to find the necessary cover such as car insurance or portable possessions cover.

4. You can’t always get what you want

As children we asked for things all the time. “Can I have that new pair of shoes everyone’s wearing” “Can I watch cartoons on TV?” “Can I stay at home by myself while you go shopping?” “Can my friends come over to play?” Sometimes the answer was “yes” and sometimes “no, now is not the time to watch TV or have friends over.” We learned that life doesn’t always work out the way we want it to. It’s the same with insurance; just because you have a policy in place, doesn’t necessarily mean that your claim will be a success. While almost all insurance claims are accepted there are rare cases where payouts are rejected, but luckily this can be avoided by abiding by all the rules of the policy i.e. taking due care to prevent losses and damages and disclosing all relevant information.

5. Never leave for tomorrow, what you can accomplish today

Our parents taught us that if we postpone our household chores or school homework in favour of playtime or TV shows, we may never get it done. With insurance, we know that getting the right cover is important and that we should do so as early as possible, yet many people don’t feel like doing it today. They may eventually discover that not having planned has left them with serious financial strain.

Our parents tried everything they could to teach us the values they believed in, so why not pass their wisdom onto your own children to ensure they make responsible and informed financial decisions as they grow up?