As parents, we all want the best for our children, and part of that is making sure they are protected with the right insurance. But with so many options available, it can be difficult to know which policies to choose, how much coverage to get, and when to apply.
Let’s look at three important types of insurance for children: hospitalization insurance, personal accident plans, and critical illness insurance. I’ll also share my own experience to help guide you in making the right choices for your child’s future.
Hospitalization Insurance: An Important First Step
Hospitalization insurance is one of the most important types of coverage for children. As parents, we understand the panic that sets in when our child falls ill. Hospital bills can quickly add up, especially for serious conditions. In Singapore, the Medisave Life plan is available to all parents and Permanent Residents, covering hospital bills in public hospitals, but it usually only applies to B2 and C1 wards, which offer basic amenities.
If you want more comfort and privacy for your child during a hospital stay, you can opt for an upgraded plan like B1 or even private hospitals, though these options come at an extra cost. I personally chose an integrated shield plan (IP) for my children, which includes coverage for private hospitals. This provides a wider choice of doctors and hospitals, as well as shorter waiting times. The premiums are affordable, and I plan to transfer the policy to my children when they are older.
Integrated Shield Plans supplement MediShield Life and provide broader coverage, including private hospital stays. Some well-known IPs in Singapore include:
- AIA HealthShield Gold Max: Comprehensive coverage, including private hospital stays.
- Prudential PruShield: Offers good coverage for both public and private hospitals.
- Great Eastern SupremeHealth: Competitive premiums with a wide range of coverage.
- Income Enhanced IncomeShield: Known for financial stability and good customer service.
- Singlife Shield: Innovative plan with competitive premiums and extra benefits like telemedicine.
- Raffles Shield: Specializes in coverage at Raffles Hospital and selected private hospitals.
Personal Accident Plans
Children are naturally active, and accidents are bound to happen. From falling while playing to cuts and bruises, accidents are common. However, not every parent opts for personal accident (PA) insurance. Personally, I didn’t purchase a PA plan for these minor injuries, as outpatient treatments are generally not expensive, and I’m willing to bear those costs. However, in case of a serious accident that requires hospitalization, my integrated shield plan would cover the expenses.
For parents who want extra protection, a PA plan can be a good option, but it’s essential to first ensure that you have hospitalization coverage. If you have multiple children, a family plan may be more economical. Some popular PA plans for children in Singapore are:
- DBS Kids Protect: Covers up to S$80,000 with benefits like accidental medical expenses reimbursement.
- Great Eastern GREAT Junior Protector: Offers worldwide coverage for accidents and sickness from 15 days old.
- Income PA Junior: Covers accidents at school or during sporting events.
- CIMB PA Junior: Comprehensive protection against accidents and infectious diseases.
Critical Illness Insurance
Critical illness insurance is another option, though it is not as urgent as hospitalization insurance. Unlike adults, children don’t need protection against loss of income in case of serious illness. However, parents may still want to invest in this insurance to protect their own income. If a child becomes seriously ill, a parent may need to take time off work, and critical illness insurance can help compensate for that loss of income.
For my children, I decided to buy critical illness term policies that cover them until the age of 99. I chose a term policy because it was more affordable—less than $1,000 per year for up to $300,000 coverage for advanced critical illnesses. I also added benefits for relapse claims, as children have a higher chance of relapsing.
When considering critical illness insurance for children, it’s important to first ensure that the parent’s own insurance needs are covered. After securing that, you can look into critical illness coverage for your child. Some popular CI plans in Singapore are:
- AIA Beyond Critical Care: Covers a wide range of critical illnesses, including early-stage cancers.
- FWD Big 3 Critical Illness: Focuses on the three most common critical illnesses: cancer, heart attack, and stroke.
- Etiqa 3 Plus Critical Illness: Offers unique benefits for non-critical illnesses.
- Singlife Big 3 Critical Illness: Provides extra coverage for cancer, heart attack, and stroke.
How to Choose the Best Insurance Policies for Your Children
Choosing the right insurance for your child depends on their needs and your financial situation. Here are a few factors to consider:
- Your Child’s Age and Health: Premiums are higher for older children or those with pre-existing conditions.
- Your Budget: Insurance premiums can vary, so choose a plan that fits your budget.
- Coverage Needs: Decide whether you want specific coverage, such as for early-stage illnesses or critical illnesses.
- Preferred Hospital: Some plans offer better coverage for specific hospitals.
- Activities and Lifestyle: Be aware of age restrictions or exclusions for certain activities.
Common Questions About Child Insurance
Q: Can I buy term insurance as a legacy plan to pass on wealth to my children?
Yes, term insurance is an affordable way to protect your family and leave behind a legacy. It provides a large sum of coverage at a low premium. However, term insurance is just one option in legacy planning. You may also consider whole life or endowment plans for long-term protection and wealth transfer.
Q: Should I buy life insurance for my kids because it’s cheap?
While life insurance for children is generally affordable, it should be based on genuine need. It’s often a good idea to buy insurance for children when they are healthy, as it ensures they will have coverage even if their health changes later.
Q: What type of insurance should I get for my children, besides a hospitalization plan?
In addition to hospitalization plans, parents can consider whole life insurance with riders that cover critical illnesses. This provides more comprehensive protection, covering medical expenses not included in a hospitalization plan.
Q: What are your thoughts on education endowment insurance for children?
Education endowment insurance is generally a low-risk investment, but it requires a long-term commitment. It’s important to review your financial situation before committing to a policy. For higher returns, parents may also consider global portfolio investments, which offer more flexibility.
Q: My child turned 21. Should they switch from whole life to term insurance?
It depends on your child’s health and needs. If they are in good health, they may be able to switch to term insurance. However, consider if the surrender value of their whole life policy can be used to reduce debts or fund other goals, or if they would prefer to keep it for future use.
When choosing an insurance policy for your child, it’s important to consider the coverage amount, policy flexibility, premium costs, and your long-term financial goals. Always consult with a qualified financial advisor to make the best decision based on your family’s needs.
