Last Updated on June 12, 2023 by Parentology
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Parenthood is a transformative experience, and as you embrace the responsibility of caring for your adorable little one, it’s crucial to prioritize their well-being. While navigating the challenges of parenting, it’s essential not to overlook the importance of planning for your newborn’s future, including securing the right child insurance policies.
With numerous options available in the market, understanding which insurance policies are vital can be overwhelming. Most of us are uncertain about our own insurance needs, let alone those of our children. In this article, we aim to provide clarity and highlight the key insurance policies worth considering to ensure a secure and prosperous future for your child.
The Significance of Child Insurance: Ensuring Future Insurability
There is one essential factor to consider when it comes to child insurance: insurability. Newborn children typically have no pre-existing conditions or illnesses, enabling them to obtain comprehensive coverage without any exclusions. In the unfortunate event that an illness or condition arises during their early years, the insurance company will be obligated to provide coverage as long as the policy remains in effect.
This highlights the importance of obtaining child insurance early. By securing coverage at an early stage, you guarantee that your child’s medical needs are protected, regardless of any unforeseen circumstances that may arise in the future.
The Importance of Health Insurance for Children
When considering child insurance, one of the crucial types to prioritize is health insurance, particularly a hospitalization plan. We believe that a hospitalization plan is a “must-have” for both adults and children. While Medishield Life provides basic coverage for B1 and C Class wards at public hospitals, a private integrated shield plan is necessary to extend coverage to higher-class wards or private hospitals.
The advantage here is that parents can utilize their Medisave funds to pay for private integrated shield plans purchased for their children. It is also advisable to consider a rider, which can cover any excess hospitalization charges not included in the shield plan. By securing a hospitalization plan early, you ensure that your child will be covered for any future illnesses or conditions that may arise.
The Importance of Life Insurance for Children
Another crucial type of insurance to consider for your child is life insurance. Life insurance provides a financial payout in the event of the insured person’s death or permanent disability. We highly encourage individuals with dependents to obtain life insurance coverage.
Life insurance functions similarly to health insurance, where prior or existing illnesses or health issues could make a person uninsurable or result in higher premium costs. When purchasing life insurance for your child, the goal is not only to provide coverage for the present but also to ensure their future protection.
Term Insurance vs. Whole Life Insurance for Children: Making the Right Choice
Choosing between term insurance and whole life insurance for a child requires careful consideration. While term insurance offers coverage for a specific period, whole life insurance provides coverage for life. Opting for term insurance means you’ll need to renew the policy once it expires, which may be challenging if your child develops health issues. On the other hand, whole life insurance ensures lifelong coverage, typically with a limited pay policy where premiums are paid for a set number of years. We conducted a price comparison online, and the results were intriguing.
| Types of Insurance Plans | Whole life with Early to Advance Stage Critical Illness Coverage | Whole life with Early to Advance Stage Critical Illness Coverage | Term life with Early to Advance Stage Critical Illness Coverage |
| China Taiping | Singlife with Aviva | Singlife with Aviva | |
| Premium Term | 20 Years | 20 Years | 30 Years, Till 30 years old (Minimum premium) |
| Death & Early CI Coverage | Life | Life | 30 Years, Till 30 years old |
| TPD Coverage | Life | Life | 30 Years, Till 30 years old |
| Basic Sum Assured | $100,000.00 | $100,000.00 | $500,000.00 |
| Early CI Sum Assured | $100,000.00 | $100,000.00 | $100,000.00 |
| Multiplier Up Till | Age 86, with the option to extend for life | Age 75 | NA |
| Multiplier | x2 | x2 | NA |
| Death/TPD/Terminal Illness (Before Multiplier Ends) | $200, 000 (Before Multiplier Ends) | $200, 000 (Before Multiplier Ends) | $500, 000 (For 30 Years) |
| Early to Advance Critical Illness | $200, 000 (Before Multiplier Ends) | $200, 000 (Before Multiplier Ends) | $100,000 (For 30 Years) |
| Death/TPD/Terminal Illness (After Multiplier Ends) | $200,000 with Multiplier gradually decrease by 10% for 5 years | $100,000 + Yield and Bonus | NA – No protection after 30 Years Old |
| Early to Advance Critical Illness (After Multiplier Ends) | $200,000 with Multiplier gradually decrease by 10% for 5 years | $100,000 + Yield and Bonus | NA – No protection after 30 Years Old |
| Cash Value | Yes | Yes | No |
| Annual Premium | $1,422.50 | $1,712.45 | $528.00 |
| Total Premium Paid | $28,450.00 | $34,249.00 | $15,840.00 |
Are you a parent looking to make the right choice when it comes to insuring your child’s future? The decision between term insurance and whole life insurance can have a significant impact on their financial security. To ensure you make an informed decision, it’s crucial to consult with our experienced financial advisors.
Our team understands the complexities of insurance options and can guide you through the process. We’ll take into account your child’s specific needs and help you determine the most suitable coverage for their future. Whether you’re considering term insurance, health insurances or the right children’s education endowment or investment plan, our advisors will provide personalized recommendations tailored to your family’s circumstances.
To take the next step towards securing your child’s financial well-being, we encourage you to fill in the form below. Our dedicated team of financial experts will reach out to you promptly, ready to address your concerns and provide expert advice.
Don’t leave your child’s future to chance – let our experienced advisors help you make the right choice today!
