Insurance for Kids

[spezlezz]

What are the typical insurance coverage for babies/kids?

I can think of the following :

1. Hospitalization Plan.
Get the enhance Medishield Plan that covers "As Charge" and no PRO-Ration

2. Whole Life
Basic coverage with Critical Illness. As this relates to age, the earlier the better to start this policy.

I was advise to get an insurance ILP for education investment. Due to the low insurance charges most money is channelled for investment which is better than endowment plan.

Any comments on the above insurance plans?

Tks,

[Starfire]

I always feels that investment and insurance should be separate which most insurance agents don't seems to agree.

[Dennis Ng]

What are the typical insurance coverage for babies/kids?

I can think of the following :

1. Hospitalization Plan.
Get the enhance Medishield Plan that covers "As Charge" and no PRO-Ration

2. Whole Life
Basic coverage with Critical Illness. As this relates to age, the earlier the better to start this policy.

I was advise to get an insurance ILP for education investment. Due to the low insurance charges most money is channelled for investment which is better than endowment plan.

Any comments on the above insurance plans?

Tks,

I agree with 1.

For 2, just get say, S$100,000 coverage, important is to attach a Whole Life Critical Illness cover.

3. ILP for education investment. ILP has lots of charges and I would say there are alternatives eg. ETF, Poems sharebuilder plan etc, that involves lower costs.

[Dennis Ng]

I always feels that investment and insurance should be separate which most insurance agents don't seems to agree.

agree with you. Remember my 2-in-1 Conditioner Shampoo analogy during the Seminar?

[wemakebread]

sharing my own experience ...

For 1, I got the "as charged" plan (premiums paid by Medisave).
I also got an enhancement plan (premiums paid by cash) that will pay for the co-insurance & deductible of the "as charged" plan. The combination of both ensures that I didn't need to fork out any of my own money in case of hospitalisation.

However, from what I understand, the above still doesn't cover minor accident & outpatient treatment. Some advisors may offer a "minor accident plan" for this, premiums generally in the range of $16-18 per month.


For 2, I was lucky that my parents bought me a whole life ILP with $100k coverage when I was around 20 years old. If I wanted to buy a new policy now, the annual premium is at least 20% more expensive. If I have developed some medical conditions, those would be excluded in new policy or I have to pay expensive rider to include them in my cover.
So it is generally wise to buy when young & healthy.

However, many of the advisors I met encouraged me to increase my coverage to $500k or more. I intend to get this increase my coverage through whole life term insurance. Term insurance does not give any returns at all, but premiums are much much cheaper than whole life ILP.


When I was younger & didn't know how to invest, I choose ILP as a way to grow money.
But after a few years, I realized that a large portion of premiums paid in the first few years goes to commissions & charges. A correspondingly smaller portion goes to investment. Not surprisingly, it usually takes at least 10-15 years, sometimes 20 years for ILP to reach break-even.

That was when I realized how expensive it was, not to have a good financial education. Because it is possible & not very difficult to get much better growth on investments & with much lesser charges.


One key selling point by insurance agents is "these products help to instill discipline of saving every month". I agree it is useful for people who are spending carelessly & not pro-actively managing their financial health. But for people who know how to save & have better way to grow their money, then it is not relevant.

[dragon]

sharing my own experience ...

For 1, I got the "as charged" plan (premiums paid by Medisave).
I also got an enhancement plan (premiums paid by cash) that will pay for the co-insurance & deductible of the "as charged" plan. The combination of both ensures that I didn't need to fork out any of my own money in case of hospitalisation.

However, from what I understand, the above still doesn't cover minor accident & outpatient treatment. Some advisors may offer a "minor accident plan" for this, premiums generally in the range of $16-18 per month.


For 2, I was lucky that my parents bought me a whole life ILP with $100k coverage when I was around 20 years old. If I wanted to buy a new policy now, the annual premium is at least 20% more expensive. If I have developed some medical conditions, those would be excluded in new policy or I have to pay expensive rider to include them in my cover.
So it is generally wise to buy when young & healthy.

However, many of the advisors I met encouraged me to increase my coverage to $500k or more. I intend to get this increase my coverage through whole life term insurance. Term insurance does not give any returns at all, but premiums are much much cheaper than whole life ILP.


When I was younger & didn't know how to invest, I choose ILP as a way to grow money.
But after a few years, I realized that a large portion of premiums paid in the first few years goes to commissions & charges. A correspondingly smaller portion goes to investment. Not surprisingly, it usually takes at least 10-15 years, sometimes 20 years for ILP to reach break-even.

That was when I realized how expensive it was, not to have a good financial education. Because it is possible & not very difficult to get much better growth on investments & with much lesser charges.


One key selling point by insurance agents is "these products help to instill discipline of saving every month". I agree it is useful for people who are spending carelessly & not pro-actively managing their financial health. But for people who know how to save & have better way to grow their money, then it is not relevant.

Hi everyone,

Do you think it's better to diversify buying of insurance plans in terms of buying different plans from different insurers? Eg. buy Hospitalisation Plan from GE, Whole Life Plan from NTUC Income, etc? This is in case if any insurer does go bankrupt in future, not all insurance plans will become wasted. Thanx in advance for sharing!

[Dennis Ng]

sharing my own experience ...

For 1, I got the "as charged" plan (premiums paid by Medisave).
I also got an enhancement plan (premiums paid by cash) that will pay for the co-insurance & deductible of the "as charged" plan. The combination of both ensures that I didn't need to fork out any of my own money in case of hospitalisation.

However, from what I understand, the above still doesn't cover minor accident & outpatient treatment. Some advisors may offer a "minor accident plan" for this, premiums generally in the range of $16-18 per month.


For 2, I was lucky that my parents bought me a whole life ILP with $100k coverage when I was around 20 years old. If I wanted to buy a new policy now, the annual premium is at least 20% more expensive. If I have developed some medical conditions, those would be excluded in new policy or I have to pay expensive rider to include them in my cover.
So it is generally wise to buy when young & healthy.

However, many of the advisors I met encouraged me to increase my coverage to $500k or more. I intend to get this increase my coverage through whole life term insurance. Term insurance does not give any returns at all, but premiums are much much cheaper than whole life ILP.


When I was younger & didn't know how to invest, I choose ILP as a way to grow money.
But after a few years, I realized that a large portion of premiums paid in the first few years goes to commissions & charges. A correspondingly smaller portion goes to investment. Not surprisingly, it usually takes at least 10-15 years, sometimes 20 years for ILP to reach break-even.

That was when I realized how expensive it was, not to have a good financial education. Because it is possible & not very difficult to get much better growth on investments & with much lesser charges.


One key selling point by insurance agents is "these products help to instill discipline of saving every month". I agree it is useful for people who are spending carelessly & not pro-actively managing their financial health. But for people who know how to save & have better way to grow their money, then it is not relevant.

Hi everyone,

Do you think it's better to diversify buying of insurance plans in terms of buying different plans from different insurers? Eg. buy Hospitalisation Plan from GE, Whole Life Plan from NTUC Income, etc? This is in case if any insurer does go bankrupt in future, not all insurance plans will become wasted. Thanx in advance for sharing!

I personally don't think it is really very important. However, different insurers might be strong in different areas eg. GE in Medical Insurance, NTUC Income in Term Insurance.

Of course, anyone considering Term Insurance can consider SAFRA Term Insurance by AVIVA as the premiums are quite low, becos of the "bulk discount".

[spezlezz]

Thanks everyone for sharing on this topic especially wemakebread.

I guess every financial advisor has their own agenda when it come to selling investment products. Like every salesman you meet will say their product is the best

Seems to me, ILP insurance charges starts to go up substantially after the age of 40yrs old ++. So keeping an ILP plan into the old age will be expensive unless the investment component have multiplied many folds. This holds true if you had chosen the right funds to invest in. Every insurance agent will say they will monitor your funds which i doubt so

With the increase in insurance charges into the older age, I guess we eventually muz have an exit plan for ILP unlike whole life insurance plan.

[Dennis Ng]

Thanks everyone for sharing on this topic especially wemakebread.

I guess every financial advisor has their own agenda when it come to selling investment products. Like every salesman you meet will say their product is the best

Seems to me, ILP insurance charges starts to go up substantially after the age of 40yrs old ++. So keeping an ILP plan into the old age will be expensive unless the investment component have multiplied many folds. This holds true if you had chosen the right funds to invest in. Every insurance agent will say they will monitor your funds which i doubt so

With the increase in insurance charges into the older age, I guess we eventually muz have an exit plan for ILP unlike whole life insurance plan.

this is true. the insurance charges for age 45 and above gets higher and higher. I suggest people with ILP plan should get from your insurer a listing of the insurance charges schedule to review.