It is increasingly common that parents purchase a medical policy for their newborn baby. Is medical insurance really necessary for a baby or child below 18? If yes, what sort of coverage is required? What else should you be aware of?
What is Child Insurance?
Child insurance can be bought the moment your baby is 30 days old. The life assured would be the baby but the proposer would need to be a parent (either father/mother). Existing congenital conditions will not be included (see full list of inclusion/exclusions). If you are the only breadwinner in the family and you are the only one paying for all the life insurance, the total cost for the entire family should be less than 10% of your family net take-home pay.
What Coverage Do Children Need?
Medical coverage is a must have coverage nowadays, especially if your favourite hospital is a private hospital. A single major illness hospitalization bill can run up to 5 figures.
Other common coverage areas are:-
Death & Total Permanent Disability (TPD) coverage is usually not important because a child would not have dependents. However, death/TPD coverage is often very cheaply available especially for young healthy children. There is a minimum basic sum assured (death/TPD) that must be purchased for most modern policies.
Critical Illness (CI) coverage is more important than death & TPD coverage because it provides much needed funds if a Critical Illness occurs. Medical coverage pays for the medical expenses directly to the hospital, whereas CI coverage provides funds directly to the parents for use at own discretion. This can be used for alternative medical treatment (e.g. overseas) or any other purpose. You can only purchase CI coverage up to the matching amount of death/TPD coverage.
It is recommended to get a medical policy for your child. For death, disability, and critical illness coverage, the decision is up to you.
