This article first appeared on LifeStuff by Singlife, a leading homegrown financial services company, offering consumers a better way to financial freedom. Through innovative, technology-enabled solutions and a wide range of products and services, Singlife provides consumers control over their financial wellbeing at every stage of their lives.
Let’s identify the top three plans that your family should be protected with.
When you become a parent, your responsibilities increase. You need to make sure that you’re ready to take care of your family emotionally, physically and financially.
With a newborn in tow, you probably have a never-ending to-do list. However, while you attend to the “here and now” needs of your new and growing family, make sure that you don’t lose sight of the bigger picture.
A crucial responsibility as a new parent is to plan for financial preparedness, and protect your little one’s future. This often involves realigning your family insurance plans to financially protect yourself and your family.
It’s normal to feel overwhelmed with the options available and a little clueless about where to start? In this article, we highlight three priority areas which you can begin to evaluate when it comes to insurance for your family.
#1: Always protect yourself first
Do you remember those safety videos that are aired before a plane takes off? Think about the scene when the parent puts on the hanging oxygen mask on herself before attending to the child.
The same theory can be applied when it comes to insurance.
Your children are completely dependent on you for all their needs. If you’re no longer able to financially provide for them, they are helpless. So, protect yourself first, before tending to their insurance needs. This way, there’s a financial safety net for your children, in case something happens to you.
One of the ways to financially protect your family against situations like death, critical illness, terminal illness and/or disability is via term insurance plans. Such plans typically pay out a lump sum of your choice, so should the unfortunate happen, your family can continue to pay the bills, mortgage, children’s school fees and other living expenses.
#2: Health insurance
While parents tend to have health cover for themselves, they often overlook taking on health insurance for their children until there is a medical emergency.
It is, however, prudent to purchase health insurance coverage early on. If a medical condition has already developed, insurers typically will not cover that condition and other related conditions. This is why parents should get health insurance for their children when they are young, healthy and free from illnesses, to secure full coverage.
In Singapore, all citizens and Permanent Residents are covered by MediShield Life. This national medical insurance provides basic coverage on hospitalisation and surgical costs, which protects your baby for life, even if they have pre-existing health conditions.
To enhance the coverage, you can purchase Integrated Shield Plans which are designed to provide higher coverage, so you need not be restricted by MediShield Life’s claim limits. Your child can be treated at higher class wards or private hospitals, and still be covered for the higher costs. And while MediShield Life does not cover pre- and post-hospitalisation treatments, an Integrated Shield Plan will.
#3: Lifelong investment for your child’s future
Because knowledge is power, the best investment for your child is giving them an education.
However, the rising cost of education causes parents to worry if they can afford their children’s tertiary education in 10 to 20 years’ time. So, naturally, the third thing you should focus on is purchasing a savings plan for your child’s education.
The earlier you start, the more time there is for your savings and investments to grow. This is because of the power of compound interest, where interest is given for your principle amount as well as interest earned previously.
One benefit of purchasing a savings plan from an insurer is the ability to add on protection riders for greater assurance. With certain savings plans, you can typically add on a cancer premium waiver – in the event that you’re diagnosed with a major cancer, the insurer will contribute any remaining premiums on your behalf, so your child’s education fund isn’t impacted and will continue to grow.
Celebrate your new chapter in life, and enjoy the fulfilling journey of parenthood. While there may be sleepless nights and tantrums now, you can at least rest assured that with adequate financial planning and coverage, your children will have a smoother future ahead of them.
This article is for educational purposes and is not intended to serve as legal, tax, investment or accounting advice and nothing contained here shall constitute a distribution, an offer to sell or the solicitation of an offer to buy. Accordingly, no warranty whatsoever is given, and no liability whatsoever will be accepted by Singapore Life Ltd for any loss arising whether directly or indirectly as a result from you acting based on this information.
This is published for general information only and does not have regard to the specific investment objectives, financial situation, and particular needs of any specific person. This article is for educational purposes and is not intended to serve as legal, tax, investment or accounting advice and nothing contained here shall constitute a distribution, an offer to sell or the solicitation of an offer to buy. Accordingly, no warranty whatsoever is given, and no liability whatsoever will be accepted by Singapore Life Ltd for any loss arising whether directly or indirectly as a result from you acting based on this information. You may wish to seek advice from a financial adviser representative before making a commitment to purchase the products. If you choose not to seek advice from a financial adviser representative, you should consider whether the product in question is suitable for you.
This advertisement has not been reviewed by the Monetary Authority of Singapore. The polices are protected under the Policy Owners’ Protection Scheme which is administered by the Singapore Deposit Insurance Corporation (SDIC). For more information on the types of benefits that are covered under the scheme as well as the limits of coverage, where applicable, please contact us or visit the LIA or SDIC websites (www.lia.org.sg or www.sdic.org.sg).
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