Planning Insurance for Your Kids

Childhood is so-called naughty age as kids are inquisitive and that may often lead to accidents and sickness. That’s why many families realize about risks that may happen to their kids and then apply life insurance to protect those risks.

However, insurance now doesn’t limit only protection against the loss of life, but it’s also a financial plan for your kid lives. Many families have already set a plan since newborn period to prepare for the future of their kids. The expenses spent on each age level vary so mindful financial planning should be made.

Life insurance seems to be a good answer for financial plan towards the kids’ future. Insurance helps create financial discipline in saving and ensure parents that their kids will be protected in the future in health, education fund and emergency money.

Life insurance is currently available in several types. Parents can choose an insurance to suit their needs such as, insurance for child education or insurance for protection of health and medical treatment.

Planning for life insurance is simple and can be started by answering questions about policyholder and beneficiary depending on the type of insurance and whether who will get protection or benefits as those factors have concerns on privilege tax.


Tips before applying insurance

1.     Study a comparison about insurance from a variety of companies to evaluate pros and cons by requesting information from insurance agents.

2.     Asking parents who used to apply insurance whether which company fits children. Listen to both pros and cons to make decision before buying insurance.

3.     Search information from website that gathers consumer reviews on insurance. However, those reviews may be written for a favor so comparison from different sources is recommended.

Source: Office of Insurance Commission (OIC)

Parents who apply an Endowment Insurance expect that when the policy terms end in about 20 years, their kids will receive a sum of money used for educational fund in higher level or fund for starting a career. If policyholder states the kid’s name and even though the parents pay insurance premium every year, that premium won’t be eligible for tax deduction throughout payment period.

While some families apply an insurance under either father’s or mother’s name as they realize their kids are too young, and all returned savings will be given to the kids when the policy ends. If an unexpected event happens to parents while the policy is ongoing, their kids are still beneficiaries. Over the period that parents are paying insurance premium, that premium can be tax deducted.

The next step is to create insurance fund by reviewing family income and arranging 10-15% of income to pay annual insurance premium. If the protection is not enough and you want to buy more coverage, you should consider your current savings and potential to make money throughout the terms of additional insurance contract.

A good thing about Endowment Insurance that offers benefits once the terms end is high protection and the premium is average. You’ll get a one-time large sum of money like you get compounding interest from cash deposit.


However, if you foresee that 20-year term is too long and intend to apply an insurance to lessen financial burden, instead of choosing to receive a sum of money at terms end, you may choose an insurance that pays cash back during the year, and spend that money for tuition fee.

The period of an insurance contract can be divided into 2 periods so you can buy 2 copies of insurance policy; Firstly, a 10-year insurance which you can plan to spend its benefits when terms end for secondary school tuition fee of your kid, Secondly, 15-year insurance which you can pay for university tuition fee for your kid further.

Apart from the main insurance policy, you may apply for additional contract such as, medical fee or accident insurance, to use fullest privilege of that insurance. Before adding on contract, you should study details about insurance coverage whether which one offers the best benefit and condition, and then pick that one.


Good Things for Applying an Insurance in Childhood

1.     Savings available for education in the future

2.     Accident and health protection

3.     Parent income protection in case of unexpected situation

Source: Office of Insurance Commission (OIC)

Best Life Insurance for Children

1.     Endowment Insurance

This insurance suits those who need savings together with life protection. Even though children can’t apply insurance for themselves but their parents can do that, and the earlier the better because they’ll be able to save money for children in the future.

2.    Accident Insurance

This insurance helps protect children or the assured in case of injury, disability or death from accident. Parents should consider insurance amount and medical protection limit in case of accident. Comparing whether it’s necessary to pay additional protection fee apart from annual premium that you normally pay.

3.     Health Insurance, an Additional Contract for Health Protection

Health insurance helps release expense burdens of parents when their children need medical treatment by buying extra contract for health protection such as, patient room fee, medical fee. In fact, you may find out which hospitals are under insurance network lists, and check whether a potential hospital for your children is in that network. Also, consider if you have to pay hospital fee in advance or you can claim for payment immediately, including terms, conditions and insurance premium.

Source: Office of Insurance Commission (OIC)


Most importantly, you must state only your children name as “Insurer” when applying health insurance as children will be protected by insurance policy. It would be better if parents are government official or company employee who get health benefit coverage for kids. Instead of paying 100% health insurance, you can choose to apply only insurance which exceeds benefit coverage.

For family that gains no benefit, health insurance for children shouldn’t be overlooked. You may choose to pay flat-rate insurance that covers all types of medical treatment either light or serious sickness. However, health insurance premium for kids is quite costly.

If you want to save premium cost, you can pay for slight sickness fee and apply only hospital room fee for an extra. You may check room rate from hospitals near home and don’t have to buy insurance covering full room rate. As health insurance is on an annual basis, you may choose to pay 80% of room rate so you can afford to pay the rest of the fee in a small amount. If you don’t claim for sickness on that year, you’ll feel relieved when you renew your insurance next year.


Tips for parents

Insurance for children can be started from newborn age and can be applied immediately. If you wait and children develop some diseases at that time, you may lose benefit as insurance will not cover their health. Or, you may wait until your children are at appropriate age such as, 1 year and over, or until your children attend nursery.

Health insurance premium is divided by the age range; for example, newborn to 5 years, grown-up from 6 – 15 years. Health insurance premium at the first stage or childhood costs a lot more than the grown-ups as small kids are more at risk. Their antibodies are not fully produced and they tend to get sick easier than the grown-ups.

Source: Office of Insurance Commission (OIC)

Even though there’s no fixed formula to set up insurance plan for children, parents are encouraged to study details for variety of insurances and then compare information among each insurance agent. In the end, make decision based on your preference and available savings to get insurance that offers the best benefit to your children, and won’t leave burden to you at present and in the future.