As parents, we all want the best for our children, and part of that includes securing their future with the right insurance coverage. But with so many options available, it can be difficult to decide which policies to buy, how much coverage to get, and when to apply.
Let’s explore three essential types of insurance policies for children: hospitalization insurance, personal accident plans, and critical illness insurance. I’ll also share my personal experience to guide you in making the best choices for your children’s future.
Hospitalization Insurance: A Crucial First Step
One of the most important insurance policies for children is hospitalization insurance. As parents, we know that when our children fall sick, panic can quickly set in. We rush to the doctor or hospital, hoping to get the best treatment. Hospital bills can quickly become overwhelming, especially for serious conditions. In Singapore, the Medisave Life plan is available to all parents and Permanent Residents, regardless of medical conditions. This plan covers hospital bills in public hospitals, but it typically only includes wards B2 and C1, which have fewer amenities.
If you want more comfort and privacy during your child’s hospital stay, you can opt for an upgraded plan, such as B1 or even private hospitals. However, these options come with additional costs. The key to deciding whether to upgrade is understanding your expectations for healthcare. For example, B2 and C1 wards have shared rooms and no air conditioning, while upgrading to B1 or private hospitals offers more privacy and better amenities.
From a personal perspective, I decided to secure an integrated shield plan (IP) for my children, which covers private hospitals. The reason I made this choice was to ensure I had a wider selection of doctors and hospitals and to reduce waiting times. While the premiums are affordable and fully paid through my CPF while they are young, I plan to pass the policy onto my children once they are older. This decision was particularly important for me because the IP plan covers not only hospitalization but also post-discharge follow-ups and outpatient consultations related to hospitalization.
Personal Accident Plans: Optional but Consider Your Risk Appetite
Children are naturally active, and accidents are bound to happen. From falling while playing to cuts and bruises, injuries are common. However, not every parent opts for personal accident (PA) insurance. The reason I didn’t purchase a PA plan for these incidents is that, generally, outpatient treatments are not prohibitively expensive, and I’m willing to bear those costs. Furthermore, in the event of a more serious accident that requires hospitalization, my integrated shield plan would cover the cost. For parents who want extra coverage, a PA plan can be a good option, but it is essential to first ensure that hospitalization coverage is in place. If your family has multiple children, a family plan might be more economical.
Critical Illness Insurance: Should You Consider It for Your Children?
Critical illness insurance is another option that parents might consider for their children, but it’s not as urgent as hospitalization insurance. Unlike adults, children do not have a loss of income to protect in the case of a serious illness. However, parents may still choose to invest in critical illness insurance to protect their own income. If a child becomes seriously ill, a parent might need to take time off work to care for them, and critical illness coverage can provide a lump sum to compensate for the loss of income during that time.
For my own children, I chose to purchase critical illness term policies that cover them until the age of 99. The reason I went with a term policy instead of a whole life policy is because it was more affordable. At less than $1,000 per year, I secured coverage of up to $300,000 for advanced critical illnesses, plus additional benefits for relapse claims. The long life expectancy of children means that the likelihood of a relapse is higher, which is why I prioritized coverage for multiple claims.
When considering critical illness insurance for children, the most important factor is to ensure that the parent’s insurance needs are fully covered first. Once you have the necessary protection for yourself, then you can consider critical illness coverage for your child.
Prioritize Hospitalization Insurance, But Consider All Options
The most important insurance policy to secure for your child is hospitalization insurance. This will cover the major medical expenses that can arise in the event of illness or injury. Personal accident insurance is optional, and whether you choose to purchase it depends on your risk tolerance and financial situation. Critical illness insurance is also an option for parents who want extra protection, but it should come after securing the proper hospitalization coverage.
If you have any questions or would like personalized guidance on choosing the right insurance for your children, please feel free to reach out to us.
Disclaimer
Every effort has been made to ensure the accuracy of the information provided, but no liability will be accepted for any loss or inconvenience caused by errors or omissions. The information and opinions presented are offered in good faith and based on sources considered reliable; however, no guarantees are made regarding their accuracy, completeness, or correctness. The author and publisher bear no responsibility for any losses or expenses arising from investment decisions made by the reader.
