Teaching Children About Life Insurance

We devote a great deal of time and effort to educating our children and considerable financial resources in many cases too. Even so, we often feel like we’re not really covering all the bases: we aren’t teaching our children everything they need to know in order to thrive and survive as adults. One topic that’s frequently glossed over or sometimes ignored completely when educating the younger generation is that of life insurance, and we’re going to fix that today. Join us as we explore how to teach children all about life insurance in Australia.

How to Get Started

The subject of life insurance is a somewhat dry and overly complex one to introduce to the very youngest of schoolchildren, but it can and should be taught to older kids, students about to embark on the wonderful adventure that we call adult life. With this in mind, we recommend waiting until your children reach their teens before going into the subject of life insurance in any great depth. When they reach the age of 13 or 14, you can introduce the topic by explaining:

• The Primary Benefits of Life Insurance – The main reason many people purchase life insurance policies is so their loved ones will receive a lump sum in the event of their passing.

• Why Term Life Insurance Is Preferred in Australia Today – In the past, both term and whole life insurance were available in Australia. However, after superannuation was made compulsory, there was no longer a demand for the investment portion of whole-life policies, so only term life insurance in Australia is available today.

• How to Budget for Life Insurance Premiums – Policies can be paid for monthly, quarterly, annually and at other regular intervals with certain insurers.

• Talking About Legacy and Remembrance

As part of teaching children about life insurance, it’s helpful to broaden the discussion to include the idea of legacy, what we leave behind, beyond just financial support. Encouraging young people to think about how families choose to honour loved ones can deepen their understanding of why planning matters. For example, some families choose lasting tributes that reflect a person’s character and values; Memorials.com offers expression in bronze personalized headstones, which can beautifully capture these sentiments. Introducing this concept can help children see life insurance not only as a financial product but as part of a thoughtful and compassionate approach to preparing for the future.

Having covered all the basics of life insurance, it’s time to think about how to help your children process the knowledge you’ve imparted and internalise it.

Making It Real

In our experience, the best way to help young minds solidify their recently acquired knowledge of life insurance is to provide real-world examples of how this type of coverage can help in times of trouble.

• A Husband or Wife Is Diagnosed With a Terminal Illness – In the event a policyholder is diagnosed with a terminal illness, most life insurance policies will pay out the full lump sum benefit without delay.

• A Child Becomes Critically Ill – If a policyholder’s child becomes critically ill, they may receive a lump sum from their insurer (depending on the terms of their policy).

These are just two examples of how life insurance can provide valuable benefits in times of crisis. If you put your mind to it, you will probably be able to think of many more. For almost all adults, life insurance is a useful product that helps ensure financial security in turbulent times, and this is the main point you should be trying to teach.