SingaporeMotherhood | Parenting

June 2014

Plan for Your Child’s Future

Baby’s here. Now what? Ms Ho Lee Yen, Chief Marketing Officer of AIA Singapore, tells us how to be ready for the years to come with our children.

Having children is a gratifying experience for all parents. Excitement builds from the time they are born, to them time when they take those first baby steps, to their very first day at school. It is every parent’s dream to see their children grow up strong, healthy and successful.

However, with rising healthcare and education costs in Singapore, the costs which come with raising children can be daunting. Recent estimates show that the average cost to raise a child from infancy up to secondary school level in Singapore can come up to $276,400.


Chances are, most parents do not have that amount sitting tidily in an account, waiting to be used. But it can be managed. With proper planning, you will be able to ensure that your children are well provided for during their most crucial developmental years.

Planning for your Child’s Medical Needs

Young children are more susceptible to illnesses and accidents. This means that they may require more visits to the family clinic. In more serious cases, hospitalization may be required.

With so many medical insurance plans available out there, it is important to evaluate and select one that suits your budget and your preferences in terms of hospital ward choices and benefits.

One such plan is the AIA HealthShield Gold Max, a comprehensive Medisave-approved Integrated Shield Plan, which you can apply for your child from as early as two weeks after birth.

With rising healthcare costs, you may also want to consider covering your children’s hospital bill from the first dollar, by taking up a rider such as the AIA HSG Max Essential supplementary rider.

This will pay for any deductible (the portion of any claim that is not covered by the insurance provider. The deductible portion is usually a fixed amount that you have to pay upfront first before the policy benefits are paid, up to a stipulated deductible limit each policy year) and co-insurance (the percentage of the medical bill that you have to pay after taking away the deductible amount) portions of your hospital bill that are not covered by the basic plan.

Why pay more for a rider? Well it comes with benefits that include:

– Emergency outpatient treatment due to an accident.
– Immediate family member accommodation (where one member of the immediate family can stay over in the hospital with the patient, all expenses paid).
– Daily hospital incentive (where the patient is paid for each day spent in the hospital).
– Post-hospitalisation alternative medicine (for cancer and stroke).
– Post-hospitalisation home nursing benefit.

This worked out well for local mummy blogger Shermeen Ching, who benefitted from planning ahead for her son’s medical needs.

“When my son was 10 months old, he had a fever that wouldn’t subside for days. He had to be admitted into the hospital for a few days for observation. Thankfully my husband and I had decided to buy the AIA HealthShield Gold Max Plan A and AIA HealthShield Gold Essential plans when our son was born. These allowed us the option of admitting him to a single-bedded ward without having to pay a cent. With young children being extremely susceptible to germs and viruses, I strongly believe that parents should take steps that can aid in alleviating their financial burden,” she shared.

Planning for your Child’s Education Needs

As your children grow older, you also want to ensure that you are able to provide them with quality education so that they can maximise their fullest potential. However, this comes with a hefty price tag, especially at the tertiary level, with local universities increasing their tuition fees by up by 7.9 per cent. If you plan to send your child abroad for further studies, you should also be mindful of rising school fees and higher costs of living, especially in big cities like New York or London (article here).

Survey results released in February this year showed that more than half of Singaporean parents are either behind target in their savings planning, or have not yet begun saving for their children’s education. As such, it is important for you to plan and set aside funds for your child’s education so that you will not have worry about whether you will be able to cope with their tertiary education fees in the future.

One savings option that you can consider is an endowment plan like AIA Smart Pro Rewards. This allows you to save towards a targeted time frame. It is a participating endowment plan, where you can choose to pay premiums for five or 10 years and receive annual coupons (equivalent to 5% of the insured amount, starting from the end of the 2nd policy year up to the end of the 14th policy year) from the second year until you receive a lump sum payout (with 85% of insured amount guaranteed, in addition to non-guaranteed bonuses) at the end of 15 years. This annual guaranteed additional cash in hand can go towards yearly treats for your child, such as school trips, or enrichment courses for your child to pursue their interest.

This plan is suitable if you prefer to have capital guarantee (applies to annual premium mode only). This means that you are assured of getting your total premiums at the end of the policy term. AIA Smart Pro Rewards provides coverage certainty, as the plan requires no medical underwriting at the point of purchase. It also provides financial protection for your children regardless of their health condition, and offers peace of mind with cover for death.

Seek Professional Financial Advice

As you and your family’s financial needs continue to evolve, do continue to speak with your insurance adviser on a regular basis to review your financial portfolio.

This is so that your insurance adviser can help access your financial gaps and recommend suitable financial solutions to help you achieve your financial goal, ensuring that you and your family can lead fuller lives together.

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Plan for Your Child’s Future