Step 1: Get your child covered for Hospitalisation and Surgery (H&S) Expenses with an Integrated Shield Plan (IP)
As a parent, you want your children to be healthy. However, injuries and illnesses are inevitable during the growing up years. It is important to be adequately insured when it happens as a visit to the paediatrics or the hospital may be necessary. You may have heard how much these bills can be and you can be sure that it is going to be hefty. Insuring your child adequately is the best way to give the best treatment for your child while not adversely affect your family finances.
Integrated Shield Plans (IP) covers for “congenital abnormalities benefit” but there is typically a 24months waiting period before full coverage is given to your child. One important reason why it is paramount to get your child covered as soon as possible is that this waiting period starts when the IP application is accepted for your child. Covering early is to your advantage. In addition, there may be a situation where your child develops a medical condition before you have purchased the IP. This could mean that the insurer may exclude covering for this medical condition as it is deemed to be “pre-existing”. In an extreme situation, your child may become unacceptable for insurance.
In addition, there may be a situation where your child develops a medical condition before you have purchased the IP. This could mean that the insurer may exclude covering for this medical condition as it is deemed to be “pre-existing”. In an extreme situation, your child may become unacceptable for insurance.
The earliest you can purchase an IP coverage is usually 15 days after birth.
Do you know the differences between each IP by each insurer?
Step 2: Top up your child Baby Bonus Child Development Account (CDA) to the maximum allowable dollar-for-dollar limits.
Raising a child is financially straining (I wouldn’t deny it!). Every dollar earned can be spent on the children diapers or milk. The government provides dollar-for-dollar matching from $6,000 to $18,000 per child, depending on the child order. Since this is one of the few “FREE” money with no strings attached, why not just leverage on it? If you do not have a lump sum to contribute in, at the very least contribute in a monthly fixed amount to work towards the maximum limits.
Do you know which CDA account give the best return?
Step 3: Increase your spouse and your insurance coverage for premature Death, Total Permanent Disability (TPD) and Critical Illness (CI).
You may have taken some insurance when you are single with minimal responsibilities. As your role expands to being a parent, your financial responsibilities have also increased correspondingly. You are your children main source of financial support (unless your children have a rich godma or godpa!).
If you were to be down with a critical illness, you may need to involuntarily leave your job to focus on treatment and recovery. This could mean that there will be no one to provide for your children’s current lifestyle and future education. Coupled with increasing medical expenses, there may be hardly any money left for other emergency uses and future needs. By insuring adequately, your family’s financial needs will be taken care of when you are unable to fulfil that responsibility. Isn’t that a responsible way to love your family?
Do you know where to compare the various insurance plans?
Step 4: Appointing guardian for your new-born
You may be wonder why this task is one of the steps since you and your spouse are your children legal guardians? A major car accident happened last Christmas and you can read up on this case with this link. I know that the probability of such a catastrophe happening is very low but accidents do happen when you least expect it.
In the event both you and your spouse are not around anymore, the powers of a will can appoint a guardian for your children. It becomes really important that your little ones will be well taken care by your trusted one, don’t you think so?
Will writing will be discussed in a further section.
Step 5: Top Up your child CPF Medisave account
Every Singaporean child has to undergo childhood vaccinations. As mentioned previously, hospitalisation and outpatient treatments are hard to avoid. All of these cost money! The good news is that most of these expenses can be paid using your child Medisave. Isn’t that great! Medisave can be used to pay for Integrated Shield Plans. Furthermore, it has a minimum 4% p.a. interest! Top up now to enjoy compounding effect.
How much do you think you should top up to?