This article was first published on 25 February 2019 and has been updated to provide additional information.
Being a new parent comes with plenty of responsibilities. Never-ending diapers change, feeding the little one every three hours, and not having enough sleep are just some of the usual challenges that every parent can expect to face.
Besides the extensive caregiving requirements that your newborn child will need, another area that parents should not overlook is the need to purchase the right insurance policy for their baby. In this article, we will highlight some of the key baby insurance policies that you should consider getting for your newborn child.
Why You Should Buy Baby Insurance Policies For Your Newborn As Early As Possible
Your financial adviser may give you a variety of reasons on why you should buy baby insurance policies for your newborn as quickly as possible, but we will just narrow it down for you to one simple reason – insurability.
Assuming your baby is delivered without any complication or congenital disorder, this would mean they have a clean bill of health. As such, your baby will be able to enjoy full coverage from any baby insurance policies that you buy for them, without any exclusions or any loading fee being added to the premiums. In the unfortunate event that an illness occurs at a later age, the insurer will be obliged to continue providing the baby insurance coverage for as long as the policy is in effect.
This is similar to the concept of why it’s better to be buying insurance policies when we are younger – and have a clean bill of health, as opposed to buying it in our later years when we may be diagnosed with an illness or chronic disease. The longer you wait to buy a health insurance policy for your newborn, the higher the chances that an unexpected illness could surface before that.
Even a one-off incident, such as a fit which is rather common, may lead to an underwriter requiring additional information and details during the application process when you buy a baby insurance policy. The underwriter may even exclude the condition from coverage or reject the application altogether.
Now that you know the reason why it makes sense to buy health insurance policies for your baby as early as possible, here are some products that you should consider getting.
Private Integrated Shield Plan
All Singaporeans and Permanent Residents (PRs) are covered under MediShield Life from birth. This is regardless of any pre-existing conditions that they may have.
However, you may want to consider buying a private integrated shield plan for your newborn as soon as you can. This not only provides them with coverage at higher-class wards in public and private hospitals, but also covers the bulk of the cost arising from medical treatments that are required in the hospital. In our view, it’s the most important baby insurance policy that you need to buy for your newborn, as early as possible.
At a young age, newborns are particularly vulnerable to falling sick as they have yet to build up their immunity system. Also, unlike adults who are able to express their discomfort, babies can’t communicate to us how they are feeling besides crying. So, at this young age, doctors may err on the side of caution when treating a baby and may recommend an overnight stay or two in the hospital for observation.
A private integrated shield plan will cover a large part of the cost that you may incur should the need to be admitted to the hospital arises. Do note that insurers have a requirement for your baby to be 15 days old or has been discharged from the hospital, whichever is later before your baby can be insured. In other words, you can’t insure your child immediately against hospitalisation when they have not yet been discharged for the first time from the hospital.
Today, there are a total of seven insurers in Singapore which provide these private integrated shield plans that you can choose from.
Aviva: Aviva MyShield
AXA: AXA Shield
Great Eastern: Supreme Health
Raffles Health Insurance: Raffles Shield
Similar to MediShield Life, annual premiums for your private integrated shield plans can be paid for using your Medisave. Any additional rider needs to be paid using cash.
Besides choosing the plan which provides you with the most extensive coverage, policyholders should be mindful of the premiums that they will be paying. This applies not just to what they are paying today, but also to the affordability of the plan over the long-term.
Critical Illness Plan; Term Or Whole Life?
There are two components to this question so let us tackle them separately. The first is why you should consider getting a critical illness plan.
It’s a painful pill to swallow but the hard truth is that anyone, even children, can get critical illness at any point in their lives.
While a private integrated shield plan will cover the bulk of the treatment cost that you may incur in the hospital, a critical illness plan provides a lump sum payout that can be used to cover the cost of alternative treatments, medication and to pay for home care arrangement.
For example, in the event of a critical illness for a child, one parent may wish to stop working for a period of time to provide primary care for the child. A critical illness plan helps provide the money needed for the family to be able to facilitate such an arrangement. It basically provides financial relief to families at the point in time that they need it the most.
Whole Life Or Term? Which Type Of Critical Illness Plan Should You Choose?
When it comes to insuring a child, a whole life insurance plan may be the more affordable option for parents to consider. This is because most whole life plans have a limited pay period (usually about 20 years), following which, coverage will be provided for life.
This is great because what it means is that your children would be able to enjoy the critical illness coverage that you have bought for them into their adulthood, without having to pay anything extra.
A term plan may have a much lower premium each year but parents, or their children in time to come, would need to pay each year for the premiums for these plans, for as long as it is in effect.
Newborns have two advantages over adults when choosing a whole life plan.
Firstly, they pay lower premiums, as compared to an adult opting for the same level of coverage. This is because being older, most of us adults will be classified at a higher risk level as compared to a healthy newborn, and hence, we will pay higher premiums.
Secondly, being younger, the ‘whole life’ insurance coverage that a newborn is going to enjoy is not only going to be cheaper but also likely to be longer compared to adults, since they will have a longer life expectancy ahead of them.
So not only will your newborn child pay less for the same level of coverage, he or she is likely to enjoy coverage for a longer period of time as compared to adults.
Personal Accident Plan
Last but certainly not least, consider buying a personal accident plan for your baby as it covers them against potential accidents, sickness and injuries.
Personal accident plans are a type of general insurance policy that provides policyholders with coverage in the event of an accident occurring. The payout could be in the form of a reimbursement basis based on medical expenses incurred, or a lump-sum payout, depending on the kind of injury sustained. This can be used to offset medical expenses, pediatrician fees, or even the cost of alternative accommodations that you may incur when your child is ill.
Also, even if we have a hospitalisation plan, the medical expenses may not be fully covered. For example, a minor accident that does not require your child to be hospitalised may still require x-rays and MRI scans and other follow-up treatments. A personal accident plan helps you defray some of the out-of-pocket expenses arising from these treatments.
Personal accident plans can be seen as a useful complement to the other existing health insurance policies that a person may already have. Coverage tends to be lower though more extensive. Premiums are typically very affordable as well.
More specifically for young children, you may also want to buy coverage that protects them against highly infectious illnesses such as Hand, Foot & Mouth Disease (HFMD), which is a common viral infection among young children.
Some of the personal accident plans in the market that covers your child for HFMD are as follows.
AIA Star Protector Plus
The AIA Star Protector Plus is a worldwide personal accident and health cover for children between 2 weeks and 16 years of age. It provides protection against accidental injuries and burns, as well as coverage for 16 common diseases, including HFMD, dengue fever and food poisoning.
AXA Band Aid
AXA Band Aid is a comprehensive personal accident plan, with an entry age of between 15 days old and 70 years old. In addition to the basic plan, you can opt for medical expenses to be covered, including expenses due to HFMD.
Manulife ReadyProtect is a personal accident insurance plan that also covers for 21 infectious diseases, such as HFMD, Zika, and dengue. The entry age for this policy is between 15 days and 55 years of age.
NTUC PA Assurance
PA Assurance from NTUC Income is a personal accident plan that has an optional infectious disease cover, which enhances coverage against 21 infectious diseases, including HFMD. The entry age for this policy is between 15 days old and 65 years old.
Sompo PA Junior Insurance
With a policy entry age starting from 1 month to below 21 years old, Sompo PA Junior Insurance is a comprehensive child-focused personal accident plan that covers medical expenses and provides a quarantine allowance for 17 infectious diseases, including HFMD, dengue and the Zika virus.
Besides buying baby insurance for your newborn child, don’t forget to also review your own personal insurance requirements, as having an extra member added to the family means needing extra financial protection to ensure that your loved ones will able to provide for themselves financially in the event of your absence.
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