A new parent’s guide to insurance for your family

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And a baby completes the family! Now that you're considering insurance planning for protect your newborn, where do we start? Let’s find out the top 3 plans that your family should be protected with.

 

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When you become a parent, your responsibilities increase. You need to make sure that you are ready to take of your family emotionally, physically and financially.

Congratulations on your promotion as new parents!

With a newborn in tow, needless to say, you probably have a never ending to do list. But 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 the financial preparedness and protection for your little one’s future. An aspect of this is to make sure that you realign your family insurance plans to financially protect yourself and your family.

However, are you a little 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. It is important to protect yourself first, before taking care of your baby’s insurance needs. In the event that you are no longer financially able to provide for the family, have you considered who will be taking care of your baby’s expenses and the monthly bills?

Your new baby and children are completely dependent on you for all their needs. It is essential to protect yourself so that the financial impact on your dependents will be reduced should anything happen. But how do you go about planning for this?

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 choosing should the unfortunate happen, your family can continue to pay the bills, mortgage, children’s school fees and other living expenses.

If you prefer a monthly income stream instead of a lump sum payout, you can perhaps consider options such as Aviva’s MyFamilyCover plan. A plan such as this one, allows your family to better manage their expenses without the fear of a fixed sum being depleted.

Another plan that you could possibly consider is Aviva’s MyProtector-MoneyBack, which is designed to give you a refund on the premiums paid if you don’t make a claim.

#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.

However, as Mr Daniel Lum, Director of Product and Marketing at Aviva Singapore, explains, “Parents should start thinking about getting health insurance for their children when they’re young, healthy and free from illnesses. This will ensure that any new medical condition that subsequently develops will be covered.”

In Singapore, all Singapore Citizens and Permanent Residents are covered by Medishield (which will be replaced by Medishield Life by end 2015). This government-initiated 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 such as the Aviva’s MyShield, and you would be pleased to know that premiums are payable from Medisave, up to the withdrawal limits set by MOH.

What’s more, if both you and your spouse are covered under Aviva’s MyShield Plan 1 or 2, up to four of your children will enjoy free medical coverage until the age of 20! In Singapore, it is the only Integrated Shield Plan that gives free health coverage to children, so you get to enjoy cost savings while your family enjoys comprehensive healthcare protection with a peace of mind.

#3: Lifelong investment for your child’s future

Knowledge is power and the best investment for your child is in education.

However, the rising costs of education cause parents to worry if they can afford their children’s tertiary education in 10 to 20 years’ time, so the third thing you should focus on is purchasing a savings plan for your child’s education.

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Education starts from young, and it is an investment for your child’s future. This should be part of your family insurance planning goals too.

“Your child’s education is something you wouldn’t want to delay. Ensuring that they can afford that education is therefore a key area that parents should consider early on. The earlier you start, the more time there is for your savings and investments to accumulate,” Mr Lum shared.

There is a variety of different savings and investment options available, depending on your preferences and affordability. Endowment Savings plans purchased from an insurer or bank is one of the most common way in which parents save for their child’s education.  For example, Aviva offers a structured savings plan, MyEduPlan, which allows you to get back a guaranteed amount when your child starts university.

For enhanced assurance, protection riders can usually be added on to such plans, to protect against situations whereby you are unable to continue saving for your child. For example, with Aviva’s MyEduPlan, you can add on a cancer premium waiver – in the event that you are diagnosed with a major cancer, not only are the premiums waived, your child’s education fund 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 abound, the best security option is to ensure that financial planning for the family is well taken care of during unforeseen circumstances. With adequate planning and coverage, your children’s future will have a smoother path ahead.

Parents, do you agree that these three areas are what you should focus on first for your newborn? Share with us your thoughts in the comments below!

This article was brought to you by Aviva.

For more details about Aviva’s plans and their terms & conditions, please visit aviva.com.sg or speak to your financial adviser.

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