Should you consider child insurance?
When you bring a child into this world, it is the most joyous moment for most people. From the time the child is born, it is every parent’s instinct to protect their child from all the troubles of the external world. This need to protect them is what makes a lot of parents worry for their child’s short-term and long-term well-being.
They realise that a child is their responsibility for the next 20 years or so or till the time they are financially dependent. And irrespective of however adorable your child looks. At the end of the day, it is an expensive affair to raise a child in a country like Singapore. You might call your little one a bundle of joy but without proper financial planning it won’t be long before your child’s expenses will weigh you down financially. It is, therefore, important to consider child insurance in Singapore.
A child insurance is a financial commitment you make at a very early age for your child to ensure she has a secure future. In Singapore, the population of children has been reducing with more and more people marrying late. This has led to the launch of various bonus plans that encourage Singaporean couples to start a family early on. Many of these plans are a combination of child insurance and savings plans. Now, if you are wondering why you should be taking a child insurance policy seriously, here are a few things you ought to know.
Raising a child is an expensive affair right from the time you conceive. Periodic visits to the gynecologist and nutritionist all through the tenure of pregnancy is an expense. Further, if you have a normal delivery in a public hospital it might cost you $3,700 whereas a cesarean delivery in a private hospital will cost you around $17,000. To add to that, you will also purchase consumables for the newborn baby, this includes diapers, formula milk, baby clothes and other miscellaneous items that also need to be purchased.
Plus, you will have to take your child to the pediatrician for vaccinations and common illnesses for the first few years after the child is born. Covering all these expenses can leave you financially depleted for the financial expenses of the future. Hence, it is important that you start saving early on to be able to deal with the responsibility of rearing a child. And one way of doing this is by opting for child insurance.
If you wish to give your child a good education, you should be aware of the allied costs involved. Your child’s education will span over a period of 18 years or so. During this period, you will have to take care of the primary school, secondary school, junior college, polytechnic, and the university related costs. The average annual tuition fees for a primary school student is $156 multiplied by 6 (as primary school lasts for 6 years) that is $936. Similarly, total secondary school fees comes upto $1500, junior college fees is about $792, polytechnic fees comes to $8,538 and university costs are estimated to be about $30,000-$40,000.
And with time these costs are only bound to increase. The question is – are you prepared to take on these expenses comfortably? This is where a child insurance policy can help you plan for your child’s future educational expenses.
We always hope for the best for your child. But God forbid, your child falls prey to some serious illness. Coping with all the healthcare costs at that point in time can make you feel financially burdened. Hence, it is wise to opt for a health insurance for your child and make sure it has a hospitalization plan. While Medishield Life provides basic coverage at B1 and C Class wards at public hospital. You will need a private integrated shield plan to extend the coverage to higher-class wards or private hospitals. You can also use your own medisave funds to pay for your child’s integrated shield plans. Having a good health care policy in place will ensure that your child is covered for any future illnesses or conditions.
Another benefit of having a child insurance policy is that it is widely accepted across all banks and you can use it as a collateral for any loan requirements in the future. This could be an educational loan for your child’s higher studies or simply a personal loan for any other major life expenses.
The uncertainty of life
Irrespective of how much you love your children, the truth is that someday we all will cease to exist. We never know when and how we breathe our last. It is, therefore, necessary to plan for unforeseen events in life and an effective way of doing this is by taking whole life insurance for your child. You can either opt for a whole life insurance or term insurance depending on your financial goals and needs. However, it is always advisable that you opt for whole life insurance instead of a term plan as the latter provides coverage for a limited period.
As responsible parents, you don’t just want to ensure the physical safety of your child but also their financial well-being in the long run. Hence, you should consider taking child insurance for your little one.
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