What Insurance Should You Get for Your Child?

This was originally posted on Planner Bee.

Bringing a child into this world is often exciting, daunting and scary all at the same time. After pregnancy and childbirth, you are now solely responsible for a life in your hands, and it’s natural for your thoughts to turn to how to protect this new life.

Insurance would seem to be the answer to cover your bases – but which products are essential to procure, and which are just nice to haves?

We look at the benefits that different types of insurance can offer your child, and, as a result, why and when you can consider getting your child covered.

Hospitalisation insurance / Integrated Shield Plans

While we hope it would never happen to us, the reality is that we might see our child land in the hospital for major illnesses or injuries. Fortunately, in Singapore, all citizens and permanent residents are covered by MediShield Life, which helps with the bills in Class B2/C wards and day surgeries in public hospitals.

However, you may want to increase your chances of getting a bed in the hospital, and in particular a certain type of ward, and getting your choice of medical care as quickly as possible. Integrated Shield Plans (IPs) can help in this regard, to broaden your child’s treatment options. They help to defray the costs of being treated in private hospitals, and staying in Class A/B1 wards in public hospitals.

Time may be of the essence when it comes to illnesses in young children. Hence, the flexibility to go the private route, and to choose your ward and preferred doctor, without worrying about the costs, can make such plans a must-have.

Other considerations to factor in would be the waiting period (the duration of time before the coverage is activated) and conditions covered under the plan. Look out for whether congenital conditions – which may be uncovered within the first few years of your child’s life – are included.

Pro tip: Evaluate Integrated Shield Plans using this comparison chart

Personal accident insurance

Besides covering injuries such as fractures and burns caused by accidents, personal accident insurance usually also addresses common illnesses. Think of Hand, Foot and Mouth Disease, Dengue and food poisoning.

Given this scope, it makes more sense to get personal accident insurance when your child is mobile and active enough to risk injuries. Or, if your child is about to start school (including infant care or preschool), where they may catch infectious illnesses. Such plans can help to offset the costs of seeing the GP or paediatrician. If you plan to travel, it may also be helpful to check that your plan provides worldwide coverage to ease your mind when you’re on holiday with your kids.

A bonus feature of this type of insurance is the cash payout that it usually provides for hospitalisation, which can complement your hospitalisation insurance.

Critical illness insurance

Given that the most common critical illnesses are cancer, heart attack and stroke, critical illness insurance may not be the topmost priority for young children.

Nonetheless, this does not rule out the possibility that critical illnesses can be diagnosed even at a tender age. Critical illness insurance usually provides lump sum payouts, which could be helpful in paying for treatments or as income replacements for parents who need to take time off from work to care for their child.

If you’re looking to secure some coverage for your child in this aspect, one answer could be the multi-generational plans that some insurers carry. For such plans, if the parents are insured for critical illnesses, complimentary coverage is also provided for their children up till a certain age. For example, Great Eastern’s Great Family Care plan covers children for critical illnesses as well as select juvenile conditions (such as severe asthma and severe epilepsy).

Life insurance

Life insurance policies usually provide a payout in the case of the insured passing away or encountering total permanent disability. Similarly to critical illness insurance, such a payout can help to provide an income replacement for a parent who has to care for a child who acquires a disability. The main difference between the two, is that critical illness insurance provides different coverage for more aspects of illness, such as the stages and types of illnesses.

In the case of a child passing away, the payout could be used to help foot any remaining medical bills if illness was involved, or funeral expenses.

It’s understandable that parents may not want to contemplate the grievous implications of a life insurance policy being needed. Such plans may hence not rank as highly on your list of protection requirements for your children. But if this is something that you still want to look into, an advantage of getting life insurance early for your child is that you will likely be able to secure lower premium rates and fuller coverage as compared to later, when they might develop medical conditions that affect their insurability. Some plans also accrue a cash value that your child may opt to withdraw later in life.

Other types of plans

Besides insurance for protection, another product that insurers provide that you may want to include in your planning would be endowment plans that help you save towards your child’s university education.

These usually have you paying premiums for a fixed term, which are meant to ultimately provide better returns than that of a bank savings account.

Read more: How to plan out your spending on your kids’ education in Singapore

Conclusion

As a parent, it’s likely that you have a ton of things on your mind concerning your child. With this breakdown of what different insurance products can offer your child, you can consider your child’s stage of development and needs to decide which to prioritise, and which you may want to explore later.