HEALTH
The $ and ¢ of
Raising a Child
By Farhan Shah
Having a child is one of the HOW MUCH IS THAT CHILD IN THE WINDOW?
most spiritually fulfilling S$500,000 in personal funds
milestones in a parent’s S$400,000 in state funds
life. And quite probably
one of the most expensive
too. We take a look at how
much it costs to raise a
00
child in Singapore, with
00,0
some help from Desmond
S$9
Kwa, Executive Financial
Services Director
representing AXA Life
Insurance Singapore.
THE COST OF FALLING
SICK (AND STAYING
HEALTHY)
S$1,500 per year for the first three years
of a child’s life for the recommended
and optional immunisations
YOUR INSURANCE POLICY,
DEMYSTIFIED
Peruse one of your insurance policy
documents. It is long and rather boring,
and filled with financial information and
legalese that would probably put any
lawyer to sleep if he was not being paid
to look through it. We had a heart-toheart chat with Desmond Kwa and asked
him what should every parent look out
for in their insurance contracts.
What are the essential keywords that
parents should look out for in their
children’s insurance plan and what are
the questions they should ask?
One of the most important terms that a
health insurance policy should have is
a “Guaranteed Renewal” clause. This
means that in the event of a claim, the
insurance company is still contractually
obligated to renew the policy, without
any increase in premiums and imposing
a medical exclusion related to the
claim. Also, most health plans exclude
pre-existing conditions and congenital
abnormalities and parents should
explicitly ask what the policy exclusions
are. Parents also need to know the
number of hours of hospitalisation
required before a hospitalisation claim is
payable. This can range from six to
24 hours.
For life and critical illness insurance,
parents should ask about the waiting
period before a claim is payable. For
example, critical illnesses like heart
attack, cancer and open heart surgery
usually have a waiting period of 90 days.
Four- to six-years-old
S$1,000 per year
Seven- to 12-years-old
S$500 per year
13- to 18-years-old
S$300 per year
Total: S$12,300 for 18 years (without inflation)
COMMON CHILDHOOD
AILMENTS
• Neonatal jaundice
• Urinary tract infections
• Bronchitis
• Pneumonia
• Hand, foot and
mouth disease
MEDISAVE NO ENOUGH
It is not sufficient to rely on Medisave for a family’s
healthcare needs. Assuming a parent has an
average income of S$4,000 a month and has been
in the workforce for five years, his or her Medisave
account would have about S$16,000, easily wiped
out if a child requires hospitalisation or surgery.
Desmond Kwa,
Executive Financial Services Director
representing AXA Life Insurance Singapore
20
Family & Life • Jun 2014
What are the essential insurance
plans that parents should get for
their children?
The advancement in diagnostic
technology allows early diagnosis
of congenital illnesses, and parents
should recognize that protection for
their children therefore also needs
to begin early. Pre-natal plans such
as AXA’s Mum’s Advantage allow
parents to cover their unborn child
for congenital conditions. Equally
importantly, Mum’s Advantage allows
parents to guarantee some form of
insurance coverage for their child upon
birth, regardless of the child’s health
condition of the child.
Every parent should get their child
covered with medical insurance,
including hospitalisation and critical
illness coverage, as soon as possible.
Should their budget allow it, parents
can also start on an endowment
plan to get an early head-start for
education savings. In addition to
providing an endowment fund for the
child’s educational needs, it also helps
parents cope with the cost of treatment
and living expenses in the event of
unfortunate circumstances befalling
either parent or child.