There’s a lot of discussions going on in Facebook regarding insurance for kids. I know all of us have different point of views. There’s no point in arguing to prove who is right or who is wrong. Whatever your view is, I respect that.
For this article, let me share you my view about what is the best insurance for kids.
I am not familiar with insurance policies offered in the Philippines. Since I’m a Singapore based financial consultant, I am only familiar on the insurance products offered here.
There are 4 areas of protection: LIFE, MEDICAL, ACCIDENT and SAVINGS.
Life protection protects us from risks such as death, total and permanent disability and critical illness. We can get this policy either TERM insurance or VUL/ILP (investment linked).
Medical protection protects us from risks such as hospital bills or loss of income in the event of hospitalization. In Singapore, a fully covered medical SHIELD plan have coverage of up to $700K per year worth of hospital bills. In case you are admitted in a public hospital, you can also get as much as $250 daily allowance on top of the hospital bills reimbursement.
Accident protection protects us from risks of all accidents. For kids, accident plan in Singapore covers not just accident but also Critical Illnesses common for children. There are also benefits such as medical reimbursement and daily hospital income.
Savings protection protects us from risk of not saving enough for future use. Great example for this policy are endownment plans. You can pay 12 years then maturity at 18 years. Right on time for college fund. It’s primary purpose is savings with a little insurance protection.
For my son Francis, I make sure he has MEDICAL and ACCIDENT plans. These are my priorities for his insurance coverage.
First of all, kids are prone to hospitalization. It could be due to illness or accident. I remember 2 months after I got accident policy for my son, he accidentally poured hot water in his body while trying to reach a cup in the table. That’s an example of accident that a child can get. As much as we parents protect our children, accident do happen. What we can only do is protect us from those risks thru proper insurance.
With regards to coverage, Singapore insurance have greater protection for medical and accident compare to Philippines. Plus it’s quite cheap to get policy here. For my son, his medical insurance is around $50+ per month while an accident plan is around $20 a month.
Life policy is not a priority for my son. As I have mentioned, it covers death, TPD and critical illness. He has no beneficiary yet, so less priority on death coverage. His medical and accident policy covers critical illness, so no point for me in getting one for now.
Again, this is my personal view as of today and also base on my current finances. If we will go back to Philippines for good, then I have to check his insurance policies again. I will reconsider getting a LIFE policy for him once my finances improves significantly, considering that it’s cheap base on his age. But then, not a priority for me. And before I can do that, I have to make sure that we as parents have enough and proper coverage on life, medical and accident.
Endowment policy on the other hand is not suitable for me. Since I invest in various asset classes, I know my money will grow more If I will invest somewhere else. Compare to an endownment plans that are mainly invested in bonds which can only give us less 4% return per year. So for my son’s college fund, I put it in a pooled fund investment instead.
My view may not be applicable for all. As I said, this is just my opinion base on my current knowledge and circumstances. Perhaps you may not agree with me, but it’s ok.
What insurance policies did you get for your children?