Do you remember your baby’s very first cry? The moment you held on to your newborn, they stop crying and took their first looked into your eyes. This special bonding grows with each passing day. You watch as they took their first steps and begin each milestone, progressing from infant to toddler. And soon after, your home becomes a constant mess while you fruitlessly rush to tidy up wherever the young ones have been.

In this moment of happiness, we always hear about the need to buy insurance for your child, to lock in the cheaper premiums and insurability at their tender young age. For many parents, it is not easy to decide if insurance is ever necessary for their young ones, and what kinds of plans to look for.

Here, I will share 3 quick suggestions on getting insurance for your child.

1. Always make sure you insure yourself first

This is a No.1 rule that many people tend to overlook. The purpose of insurance is to offset your liabilities to the insurer so that your family does not have to take on sudden financial burden should something unfortunate happens to you.

An insurance plan with your child as the life assured doesn’t help resolve the immediate financial concerns they will immediately take on, should the above scenario happens. If you have outstanding liabilities for a new house or car, all these will easily vanish without the appropriate stream of income to support them.

In addition, do not take for granted the impact of living and future education expenses. If your family is unable to sustain a similar level of income, they will need to adjust their expenditure accordingly which may lead to big lifestyle changes.

2. Hospitalization coverage, consider and understand policy term carefully

As Malaysians, we get to enjoy a much cheaper treatment cost when we visit any government hospital, which can be as low as RM1. This provides a huge safety net that helps cover the person against large unexpected hospitalization bills. For many people employed in the workforce, their companies also provide additional employee benefits through group medical insurance.

However, we all know the long waiting list in the government hospital that not everyone can take it easy especially when your child requires immediate attention. Going to a private hospital will be the next best resort provided the parents can afford.

Children in their quest to explore their surroundings, do get injured from time to time, they tend to also fall sick easily and constant trips to the hospital can rack up some hefty costs. With the hospitalization coverage in place, you can easily seek the appropriate treatment without being overburdened by costs.

However,  you want to be cautious on choosing the medical plan as some plans only cover treatment while you are in the hospital, while others will also provide outpatient help (Corporate insurance).

3. Life plans are privilege, not a necessity

The question of whether to buy life insurance for children sparks strong debate about the value of such policies.

A child is entirely dependent on you for their daily living, and would unlikely have any liabilities this early in life. If you decide to get a life plan for your child, it would essentially serve two purposes:

Firstly, in the unfortunate case where your child develops a severe critical illness or suffers from the total disability, you would likely have to support them far longer than expected. This could mean home modifications due to mobility issues, or the recurring cost of long term medication to keep the condition in check.

Secondly, if things go well, the life plan would be helping your child offset this future cost.

Before you buy

Look at your entire financial picture to make sure you’re saving enough and covering bigger risks. Other, more critical financial matters should come first before you even think about buying a life insurance policy on a child. Those include building an adequate emergency savings fund, making sure you and the child’s other parent have enough life insurance and disability insurance, building savings for the child’s college tuition, and getting your own retirement savings on track. The main purpose of life insurance is to replace income and/or cover debts in the event of a provider’s death.

The important question to ask is: Do you and your spouse have enough life insurance?