Do You Really Need Insurance for Your Kids?

Insurance has become more and more popular these days than it was many years ago.

More parents are realizing the need to have their children insured for medical and future stability reasons. The ever-increasing medical cost is also another reason why many parents are opting to have insurance for their kids.

Although parents are taking every possible method to ensure their kids’ health and therefore probably reducing the need for insurance, many parents preferred to be armed with one so that if ever anything happened to their children, they don’t have to worry about medical bills.

But how do you know if you really need to have your kids insured?

Selecting the right insurance is a decision that needs to be made with care as there are many insurance providers out there and each one is claiming to be the best in providing what the other is not. The best way to do this is to know what you want first before you seek out any insurance agent.

There are two types of insurance – a life insurance and a medical insurance.

Life insurance like whole-life for instance, insurance will insure you for your entire life. Medical insurance on the other hand will usually only cover your medical bills. Depending on what you want and your financial situation, you can opt for either one of these.

Know what you’re looking for
 

• Are you looking for insurance that pays your children’s medical bills as well as acts as their savings or are you looking for one that simply pays his medical bills when any unexpected illnesses happen?
   
• Many parents feel that life insurance is unnecessary for children, as life insurance will pay out a lump sum upon the death of the policyholder. Considering the low mortality rate among children, many parents will only take up life policies for their children once they come of age.
   
• Medical insurance seems to be the more practical choice, as children tend to fall sick now and then. Having an insurance that will cover your children’s medical bills and hospitalizations can take your financial worry away while you take care of your children

Know your family medical history
 

• Before you sign up for any policy, it is important that you find out about your family’s medical history. You need to list all the illnesses that your family members have suffered for the insurance company’s record purposes to know what you can be insured for
   
• Some insurance companies do not cover certain illnesses so you need to know before you sign up. You might have to pay for higher premium should your child be diagnosed with any critical illness that is not listed under your records. Plus, if you knew of your family medical history and do not advice beforehand, it can lead to policy termination

Understand your financial situation
 

• Life insurance can cost less as the premium is usually paid on annual basis. Especially if a life insurance policy is taken up at a young age, the premium can be even lower. However, it may not cover as much critical illnesses or medical bills as medical insurance does
   
• Depending on what you can afford, concentrate on one insurance type first and go with the one that is more important to you. When your financial situation improves or stabilizes, you can always take up a different insurance policy or “top-up” on your existing one
  You can also opt to have your children as rider first until you’re able to get them their individual policies. Rider, in insurance terminology, means attached benefits to your personal existing policy. Some insurance companies offers a rider that will cover your spouse or children insurance term benefits

Here are some other key things to remember or consider before you purchase an insurance policy:
 

1. Talk to your friends and/or family members who have insurance policies. This will help you understand their experience with it so you can know what to expect. This can also help you to go with the right agent as your family and friends will tell you whether their agents are helpful or not.
    
2. If you’re signing up for a policy through an insurance agent, make sure to check his or her qualifications. All Malaysian insurance agents need to be recognized by Life Insurance Associations of Malaysia (LIAM). They need to pass a test by the Malaysian Insurance Institute so they’re able to help you with what you need in insurance.
    
3. It’s also important to know the financial strength of the insurance company of your choice. It’s not uncommon for insurance companies to go bankrupt. So you’d want one that will be around to cover your kids’ medical bills or pay out your children’s insurance benefits when the time comes.
    
4. Take your time to decide and read up as much as you can on the policies offered by various insurance companies. You don’t want to be under-covered and neither do you want to be over-covered. Speak to your insurance agent as often as you need to and take time to understand the coverage offered. And do forget to read the fine prints!