Take Cover

It could be the most important form of insurance you’d buy 
for your child, but how do you know what policy to choose?

When her daughter's fever wouldn't subside, Sharon Tan took little Chloe to the A&E. It turned out Chloe had Kawasaki disease, says the 32-year-old finance manager. Five days of hospitalisation, two follow-ups (including a heart ultrascan) and six months of medication left the family $7,000 poorer. And because the two-year-old girl wasn’t insured, they couldn't claim a cent.

That’s why health insurance should be considered “the most essential insurance” for children, says Tang Yin Fong of Providend Ltd, an independent private wealth management company. She is a senior specialist consultant and the person in charge of the Risk Management (Insurance) Department.

If you’re banking on Medisave to cover the bills, that may not be enough, cautions Pauline Lim, executive director of the Life Insurance Association. In fact, a 2009 AIA survey found that only 20 per cent of respondents felt that Medishield provides adequate protection for medical expenses.

This, together with the Integrated 
Shield Plans, provide health insurance for Singaporeans to take care of major illnesses that may lead to large hospital bills.

The AIA Life Matters Index survey also showed a greater awareness of the importance of health insurance. That has translated to more parents taking up such policies for themselves and their little ones.

For instance, Prudential’s Prushield has received overwhelming response since its launch in October 2005. Each year, more than 80,000 new policies are received, with over 30,000 for Prushield Extra, reveals Tomas Urbanec, chief marketing officer of Prudential Singapore.

Insurance companies are also creating plans where the entire family can benefit, as long as parents are covered. For example, Aviva’s Myshield offers free coverage for children up to 20 years old, if both parents are covered under Myshield, subject to terms and conditions.

With such a bountiful buffet of plans, complete with terminology and jargon to confuse, choosing the right plan can be a challenging task. Where do you start?

Read the July 2010 issue of Young Parents for the full story, and insurance buying tips from experts.