Children in their early twenties often take advantage of staying on their parents’ health insurance plan to allocate their financial resources to cover other typical expenses, such as rent, student loans and car payments. However, by age 26, children can no longer be on a parent’s health insurance policy. As a parent, there are some ways you can help your adult children prepare to select and budget for their own insurance policy.
Many young adults are simply unaware of the cost of health insurance. Unknowingly, they lock themselves into nonnegotiable expenses, leaving them with little-to-no room to pay health insurance premiums.
According to the U.S. Department of Health and Human Services, the average cost of an individual market premium in 2017 is $5,712, meaning the average individual will pay nearly $500 a month for health insurance. For many young adults, this is a high expense for which they have not prepared to cover.
In order to combat this growing problem, it is important new college graduates understand this impending cost long before it hits their bank accounts.
Parents can also use the open enrollment period at their adult children’s workplace to educate and prepare them for the costs of health insurance. By making them aware of the different options and costs association with each type of plan, parents can help their children properly prepare for this future expense.
Alternatively, young adults can also call their parents’ health insurance agents to determine the cost of health insurance. Agents will be able to help them understand what the going rate of insurance might be for them by the time they transfer onto their own plans.
Understanding this imminent expense will help young adults deter from decisions that may put them in a future dilemma, as no person should have to decide between making a car payment and having health insurance.
By helping our workforce’s next generation of workers prepare for their future expenses, we are able to help them avoid making decisions that may force them to decide between their health and defaulting on other payments. For additional financial lessons for children, please request more information about my complimentary workshop, Raising Financially Fit Families, which I present to groups and organizations of all sizes.
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Securities and Investment Advisory Services offered through Signator Investors, Inc. Member FINRA, SIPC, and Registered Investment Advisor. 8515 Cedar Place Drive CEDAR PLACE DRIVE Suite 108 Indianapolis, IN 46240 134-20171102-411199