Financial Experts

Goh Ee Fann ChFC CLU is an insurance professional representing Prudential Assurance Company (S) Pte Ltd

Q. What kind of Insurance should a new parent buy for their new born baby?

Buying insurance for children sounds like a very good idea as the premiums for the policies are usually cheaper for their young age and serves as a good savings plan. However, parents should take up insurance for their children with the following objectives in mind:

  1. Lock in low premium rates for their children at a younger age, so that they can have better coverage at a lower price.
  2. Inculcate a savings habit by asking them to continue their insurance plan after they start working.
  3. Having a head start in saving a lump sum for children’s housing or further education soon after they start working.

Parents should take note that savings plan for children’s tertiary education would be better if it is applied on the parent’s life, due to:

  1. The insurance coverage would be on the bread winner instead of the child.
  2. At the end of the maturity term, the parent would be controlling the money even if the policy was under the child’s name.

Q. Should I be writing a will when I have a child?

The most common consideration for writing a will is cost effectiveness for creating one. Usually when one does not have must assets, it may not make economic sense to pay for writing and maintaining a will, especially when he/she have put arrangements into all the assets such as joint tenancy agreements and CPF nominations. However, if one sits down and write out all his intentions, it could be half the battle won.

Some of the considerations are:

  1. Do I manage to cover all my debts with my liquid assets?
  2. How do I intend my non liquid assets to be managed or distributed?
  3. Did I provide something for all my loved ones?
  4. Have I appointed a legal guardian for all my children? (If both parents died)
  5. Have I provided for mental incapacity and filled up an Advance Medical Directive?
  6. Have I taken care that my loved ones do not end up in a legal tussle?

The list is not exhaustive and different people have different concerns, however the biggest function of a Will is to help prevent conflict and disharmony due to either lack of planning or lack of communication.