Today’s Motherhood

Dear Gurus,

I understand that children get hospitalized often when they are young. I’m thinking if I should get hospitalization insurance plans for them, since I have the option to extend my company group insurance to my family.

Angeline, 28

Guru Foo:

Angeline, it is wise of you to know that the probability of children getting hospitalized in their younger days are higher. It’s just like how I will advise my clients: “Which will you rather pay? Insurance premium or hospital bills?”

It is wise of you to opt for your company group insurance extended to your family as you can enjoy coverage at a group rate. Do find out if your company hospitalization insurance is portable. If it is non-portable, it means that you and your family will not able to enjoy the coverage once you leave your company and by then, some of you and your family may have experienced changes in your health and will become not insurable.

If it is non portable, do consider taking up some form of individual insurance coverage.

Guru Ed:

As Guru Foo has mentioned, having a portable insurance is more important than an affordable insurance, because if it is not portable, it only gives you a sense of false security that you are protected. But once you are not the employee of the company, all your coverage is lost.

Since the liberalization of our Medisave account in Singapore, many insurers are providing child hospitalization insurance plans at an affordable premium payable via Medisave. One of the insurers even provide free coverage till the child turns 20. All the insurers have the option to add a rider payable by cash if you feel that the basic plan is insufficient. It is important that you have a comprehensive and portable medical plan that you truly own.

Do you have any questions on finance or insurance for our experts? If you have, please go to our Ask The Experts section for financial advise.

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Question:
How can I teach my children to be prudent about money?

Mummy knows Best

Answers:

Guru Ed:
Thank you for asking! It’s my area of expertise! Having 3 young children of my own, it has always be an area of concern for me.

Firstly, for some saving money tips, take them to a bank to open their own savings account.

Secondly, ensure you bring them to a place to choose their own “piggy bank” to ensure that they have an ownership.

Lastly, lead by example, make sure you as a parent also save at least 10% of your income, showing them that you can save too!

Guru Foo:
If your children is of a very young age whereby “money” is nothing has no meaning to them, then , you may wish to consider what Guru Ed has suggested. Inculcate to them, the value of money by starting a saving habit.

If your children already have the ability to count their money, then you may want to start them off with a budget.

On top of that, you can also consider teaching them about making money, for example, making handy crafts to sell to make some pocket money for themselves.

With the money, perhaps you can teach them about value of money, like giving it to charity to help others in need or to save it to buy things that they want rather than to ask for it. Earn it, not ask it.

Do you any questions on finance for our experts? If you have, we welcome you to go to our Financial Expert section to submit your questions.

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Question:

Dear Money Gurus, I’m a mother of another new born. Currently, my insurance advisor is telling me to start a Life Insurance plan for both of my boys. But since the birth of my new born, I do not have a lot of spare cash now. What are your advise?

Cashless Mom

Answers:

Guru Ed:
Congratulations! I can understand why you are at a cross road now. Money is never enough. Should you start a life insurance policy for your child? I will suggest that you may wish to consider a education endowment plan instead. Such plan will generate an average of 2.75% - 3% p.a of returns which is far better than to put it in the bank.

With a rider of waiver of premium, you can be assured of your little boys education, should any unforeseen circumstances happen to either of the parents. Budget within you r own means. Start small, rather than not to start at all.

Guru Foo:

Dear Cashless Mom, you are not alone in this situation. Many young parents do go through the same phase. May I ask what your priorities are for your children? Providing coverage for them while they are young or building up their education funds?

Major mistake for parents is to start buying insurance policies for children, while neglecting their own coverage. Remember, parents are the money making machine. It should be protected 1st. Perhaps, you can start a simple SAVE-AS-YOU-EARN scheme, until you are comfortable with your finances, then you can consider to start either a life policy or saving plan, according to your priority then. The key is to start the habit of saving and protect the potential income of your family.

Go to Ask The Expert Section.

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