Types of insurance plans you need for your child

In the jungle of insurance, it is easy to get confused when deciding which insurance product best suits your child. 

Parenthood has a way of jolting people like almost nothing else in this world – you are suddenly responsible for another person’s life. There are a whole lot of new things to pick up as first-time parents but one area that parents should not neglect is child insurance. Here are some of the insurances you might want to consider buying for your child.

Pre-natal Insurance

Did you know that you can get your baby insured even before he or she is born? Pregnant mothers can get a prenatal insurance that protects you financially by paying a lump sum in the event of pregnancy complications or congenital diseases when your child is born.

Some prenatal insurances can be easily converted into an investment-linked insurance plan with supplementary riders (e.g. critical illness, personal accident coverage) for your child after he or she is born.

Health Insurance

Health insurance (mainly hospitalisation plan) is one of the basic insurances that everyone should have. When Medishield Life provides basic coverage at B1 & C class wards in public hospitals, you will still need a private integrated shield plan to extend the coverage to higher-class wards and even to private hospitals. You may also wish to add on riders to cover any additional hospitalisation charges that the shield plan may not cover.

Endowment Policies

Endowment policies are regular premium policies whose primary purpose is to save for a specific purpose over a period of time – usually varies between 10, 15 or 20 years. There is a small protection element, however the sum assured is not high as the purpose of this policy is to act as a savings plan. An endowment policy gives you a return higher than bank deposit rates and thus, it encourages saving in a disciplined manner.

If you’re saving for your child’s university education, it will be wise to take up an endowment plan for 10 years when your child is 8 or a 15-year plan when your child turns 3. Some parents also take up an endowment plan as a wedding gift to their children. Discuss with your partner and work backwards on when you would like your child to have these funds and the amount before deciding to buy an endowment policy.

Look at your entire financial situation to ensure that you’re saving enough and covering bigger risks. If you are, then you can consider purchasing a life insurance for your child but it is not a priority as the main purpose of a life insurance is to replace income and/or cover debts in the event of the provider’s death.


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