Sunday, July 13, 2008

Insurance for a child

Dear Mr. Tan,

I am planning to buy an insurance plan for my younger boy of age 7. I am looking at either the LUV plan which is $12 per month for $100K as compared to the Legacy Life CI plan recommended by my agent.

I am in favour of buying LUV, but my agent told me below:

""I have deviated from the basic & giving wrong emphasis and that I have made the 7 common insurance mistakes parents make. No doubts term policies are a lot more affordable & more cost-effective to buy a portion that will last almost as long as you live and the rest to cover just your working years. When come to insurance for minor, health insurance focus is on both CI & H&S & the aim is to lock-in insurability & gifts of love. ""

I am confused. He is right in the above statement? Thanks very much for your time

REPLY
There is no need to buy insurance for your child, except for medical insurance. It is more important that you should adequate term insurance on your life, to cover your earning capacity.

Read this FAQ:
http://www.tankinlian.com/faq/childlife.html
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4 comments:

zhummmeng said...

Your agent is exploiting your emotion and your love for your child...all salesmen are good at this. Don't be taken in by these unsrucupulous insurance salesmen and women.
Insurability is a common ploy used by insurance agents.
Ask the agent whether you need to insure child's future family and 5 children he might have in 30 years' time and your child's children's children. This can become ridiculous, isn't it?
And what legacy when you are struggling with the present? Insurance is NOT about your future needs, it is about IMMEDIATE needs.
What your child needs is an H&S medical. The most important person to need A LOT of insurance is YOU.After settling all your needs maybe you can go to NEXT important person and so on if you still can afford.
A person CANNOT meet all his needs at once because of his LIMITED resources. He has to prioritize.
Yes, it is good to insure your child for critical illness but his needs for this insurance ranks low in your family hierachy of needs.The most important person is you and without you whatever plans you have for your other members of your family will be derailed in the event that something happens to you and you will leave them MONEY NO ENOUGH.
This is another reason why whole life fails miserably as an efficient insurance and you notice agents now tout it as insurance for old age.It is jumping the gun, don't you think so.Earlier I said insurance is for IMMEDIATE and NOT for an imaginary event in the future which you do not know whether it will happen or not.It is better to prepare with money if one is paranoid about it.
My advice is 'Don't put the horse before the cart'.And putting the horse in front of the cart is DON'T USE AN INSURANCE AGENT to look after your personal finance.. You already saw they fumbled for you, right?

July 13, 2008 7:38 PM
meklavier said...

Another tots from me.

So you are saying children cannot get critical illness? The stats are showing critical illness for kids are rising.

Have you last check how much is the bill for cancer patient in camden clinic(not sure if the spelling is correct or not)?

July 14, 2008 5:10 PM
zhummmeng said...

Yes , children can get CI but first let H&S take care of it first. H&S should be able to handle a large portion of the bill.
Yes, after the bread winner , you can insure the child with CI insurance but many people stupidly and unwittingly use whole life and pay high premium at the expense of other needs, like the bread winner or other children's needs.
You asked what is the bill? Which can give you more coverage, wholelife or term? Are you serious about protection or you are confused with saving? Is your concerned NOW or you are worry about when the child is 70 years old? You know the premium for a $20k sum assured whole life product can give you a few hundred thousand
with term. Which one can take care of your problem?

July 14, 2008 7:45 PM
Crazy Aries said...

if i'm a father, I will get my child the following policies;

- a private shield, at least can cover up to B1 ward.

- a wholelife, not more than $50K SA.

- a term / living insurance (at least $100K), most likely from SAFRA.

July 15, 2008 10:31 AM

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