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Why Not Buying Life Insurance For Yourself May Impact Your Child More Than You Realise

As parents, life insurance policies provide financial stability for our children in the event of our absence.


This article was written in collaboration with NTUC Income. All views expressed in this article are the independent opinion of DollarsAndSense.sg based on our research. DollarsAndSense.sg is not liable for any financial losses that may arise from any transactions and readers are encouraged to do their own due diligence. You can view our full editorial policy here.

Recently, someone in an Insurance Discussion Facebook Group that I am part of shared this video from NTUC Income. If you haven’t already seen it, spend a few minutes watching it – it’s one of the best video ads I have ever watched and carried one of the most powerful messages I have seen in an ad.

As a father of two girls (for now, :)), the biggest fear that my wife and I have is that we won’t be there for them when they are growing up. Parenthood has a strange way of doing that to you.

Before them, the most important thing for me was my career and business. The day my baby girl arrived, I knew things were never going to be the same again for me.

Suddenly, a lot of the things that used to matter were no longer important.

A bad day at work because I had a disagreement with my colleagues or got unfairly reprimanded by my boss? Well…that’s the working world. No longer able to meet up with my group of friends anymore. Well…that’s life.

Replacing these priorities were other simple but meaningful things which the girls love – such as coming back early for dinner each day, finding time to read with them daily and being able to put them to sleep every night. On weekends, we also find activities to do such as swimming, going to the park and attending art and music classes. Some of these activities cost some money, others are free.

Besides these things that I do with the girls, another important priority for me personally was reviewing my insurance coverage. With two young girls dependent on me, it was not something that I could afford to ignore.

Buying Life & Critical Illness Insurance Isn’t About Protecting Ourselves

Contrary to what some people may think, buying life insurance isn’t remotely about getting rich. It isn’t even about buying it for ourselves. Rather, as parents, life and critical illness insurance policies are meant to provide our children with financial stability if unfortunate events such as critical illness, permanent disability or death occur. If any of these events occur, our children’s lives would undoubtedly be adversely impacted. However, the insurance payout can minimise a drastic downgrade in the standard of living for our children.

When our kids are young, we provide everything they need. These include daily necessities such as food, clothes, books and of course shelter. We also give them unconditional love, care, protection, time and guidance that they need from us to grow up in a safe environment.

Beyond just meeting the basic living necessities, being able to afford some luxuries, like going out to a restaurant or a theme park, visiting an overseas country and buying a present on meaningful occasions, adds to the growing up experience that they can enjoy as a child.

As parents, we want to continue giving our children all of these things, at least until they are old enough to earn a living for themselves.

One of the first things I did after becoming a father was to buy more life and critical illness insurance. This stems from my fear that while I am relatively confident in providing financial support for my girls when I am around, there is a chance that health-related illnesses or an accident may prevent me from doing so. The insurance policies I bought are meant to provide crucial financial support for my girls in my absence.

Providing For Your Kids During Both Good & Bad Times

As parents, we naturally want what’s best for our kids. Most parents would not think twice to make personal sacrifices, including financial ones, to give our children the best we can afford. In a recent research conducted by NTUC Income, 85% of parents agreed that their child’s happiness is integral to their own happiness. 82% also agreed that money and financial security are important to their child’s happiness, especially when they are young.

Even when we choose to spend more on our kids, we need to remember that providing financial stability for them isn’t just about giving them as much as we can afford today, but also ensuring that we continue to afford the same things for our children in the future that we are already giving them today.

Our children grow up getting used to the lifestyle and activities that we provide for them today. For example, some parents may spend more on enrichment classes such as violin or sailing lessons and their kids may grow up enjoying these activities. Others (like myself) may prefer more common activities that can be equally enriching, such as swimming, roller-blading or martial arts lessons. In addition to activities, we will also spend on things such as gifts for them during special occasions and overseas trips or staycations.

In fact, the research found that parents spend an average of $10,300 per annum on each child for the most highly ranked items that contribute to a child’s happiness.

Source: NTUC Income

In both instances, children – whether they are taking a sailing lesson or a swimming class –  may find these activities equally enjoyable. As parents, we want to encourage our children to pursue these interests. For gifts and holidays (or staycations) that they go on, it’s frequently the value of the gifts and the time they get to spend with us that matters, rather than just the cost of it.

As a parent, I have control over the kind of lifestyle that me and my wife want to provide for our girls when we are with them. If we are healthy, we can work and provide a living for our family. We will know what we can afford, and more importantly, what we can’t afford.

However, the problem comes when health-related matters or an accident may prevent us from working and allowing our children to pursue activities they are already enjoying and live a life they are accustomed to. It comes as no surprise that 73% of parents feel that they have no choice but to cut down on expenses linked to their child’s happiness if they are down with a critical illness or an accident that will result in financial pressure of having to choose between necessities or nice-to-haves items that contributes to their child’s happiness.

This makes sense. If we are diagnosed with a critical illness, we may not be able to continue earning an income. In addition, the cost of treatment will also be added to the family’s expenses, causing additional financial stress. During this period, it’s likely that non-essential expenses such as hobbies and interests will be among the first to go.

But does this need to be the case? Does financial provision for our children need to be tied to our individual ability to work? Does this mean that if we have a critical illness or an accident that we can no longer provide for our children?

The simple answer is that it doesn’t have to be.

Get Sufficient Life & Critical Illness Insurance To Ensure Long-Term Financial Stability For Our Children

While no one can prevent critical illnesses or accidents from occurring, what we can prevent is for our children to be financially impacted by our illness. We can do this by having sufficient life and critical illness coverage.

This, at the very least, ease the financial pressure on us as parents since the payout from our insurance policies can help us with the additional bills that may be incurred for the treatment and recovery. Also, our children are not forced to downgrade their standard of living and forgo activities that they enjoy. During a period when the family has to make difficult living adjustments, being able to continue with some of these activities can also provide a sense of normality for the kids.

In the event of a parent passing on, the family has to make adjustments. No amount of money can replace the loss of a parent for a young child. However, having sufficient life insurance coverage can ensure that the child will not be impacted financially and can continue with the same activities that they value and to minimise any disruption to their future education.

When You Have Kids, Buying Life Insurance Is For Them

For even tight-knitted and resilient families, a critical illness or an unfortunate accident can change family members’ lives, including the kids. While children can adapt well, and in some cases, better than adults, it’s inevitable that a serious illness or accident to a parent will impact their lifestyle and happiness as well. And children themselves also recognise this.

According to the NTUC Income research, children were most concerned about their parent’s ability to afford medical bills and not being able to spend quality time with them. 90% of them were also concerned that their lifestyle would be impacted due to a lack of money, such as not being able to do things they enjoy, to go on family vacations, to receive gifts or buy the latest gadgets and more.

If, like me, you have kids today, do strongly consider getting sufficient life insurance and critical illness coverage for yourself and your spouse if you have yet to do so. If you didn’t get these insurance policies when you are single or married without kids, it would have only affected you and your spouse. But when you have kids, not having these policies will have a greater impact on their lives than your own – and this is where a life insurance plan for yourself can help protect your child’s happiness for life.

If you wish to find out more about how insurance plans can suit your financial planning needs, let NTUC Income help you take the first step towards protecting your child’s happiness today.

Read Also: 6 Interesting Insights From NTUC Income’s Study On Retirement In Singapore