Picking insurance policies that best suit your needs

An insurance policy protects your child from the uncertainties of healthcare costs. Learn how to shop for the right plan…


While you can’t predict what the future holds, one thing’s for sure ― your child will have to learn to stand on his own feet in the not-too-distant future. So, a sound insurance policy will become a crucial financial resource that’ll cushion him from the unpredictable events of the future.

As the market has countless types of insurance plans, choosing the right one can be a challenge. Alzee Lee, who is with Aviva Financial Advisers, points out that you can narrow your choices by picking one that is in line with your financial objectives.

He explains, “Some people prefer to go for investment policies to prepare for retirement, others take up policies [as a form of savings] to manage future financial risks like the death or hospitalisation of a loved one.”

Besides identifying your aim of buying an insurance policy, you should also make sure that you will be able to continue paying for the premiums.

“If there’s any health condition discovered after birth, you may not be able to buy life insurance for your child.”

Lee advises parents to buy a policy for their baby during pregnancy, so as to avoid getting reduced coverage should their child be diagnosed with a health condition. “If there’s any health condition discovered after birth, you may not be able to buy life insurance for your child at all.”

Even if you are able to get an insurance policy for your ailing child, there’ll likely be exclusions in the coverage or additional loading fees or riders, which can increase the cost of the policy. Here are essential insurance policies to consider buying:

Life Insurance

WHAT? You will be paid a cash amount — also referred to as the sum assured ― after the diagnosis of a critical illness, permanent disability or when the policy holder dies.

Life policies are divided into several types:
*Term-life: Only provides coverage for a pre-determined period of time. This kind of policy does not give any cash pay-outs, unless the insured person dies or suffers a permanent disability. If no death or permanent disability occurs during the insured period, then the policy lapses without any money being given.

*Whole-life: Provides lifelong financial protection for your children and pay-outs will only be given to the beneficiaries when the policy holder dies.

*Endowment: These are to help you meet your child’s future education needs or to build up your retirement nest egg.

*Investment-Linked Insurance: Similar to a bank savings plan, except that you might enjoy a higher interest.