1) Medical - 2 portions to cover,
i) Shield to cover hospitalisation as charged.
ii) Rider to cover the 'excess' and 'co-payment' that Shield doesn't cover. This is expensive but still worth it cos 70% of hospital claims is below the excess ($3,500)
For mid level coverage (non private), shield is $418, rider $268. Total $680. Annual benefit $400k.
2) Critical illness - pay per event. Not based on hospitalisation.
Strategy is to move a portion of saving to a 20yr plan. Premium at $4000pa for $200k coverage:
- only pay for 20yrs, coverage for life
- as your other savings grow, this CI policy has investment component to grow too.
- at end of 20th year, can opt to stop and get paid $200k (?) + bonus. (may have gotten this wrong. Will clarify).
Note: there is a $1m coverage limit in singapore. After which one will have to undergo extensive medical check. Heart / diabetic condition and cancer Patient will not be accepted.
3) Savings/Education
strategy is to plan a payout of $7-10k when child is at age, 19 to 21 (4yrs).
Flexible -20 with Critical Illness + savings at 14th,15th,16th and 17th yr (if child is 5yrs old).
Premium for basic + CI is $2k. for each of the 4yrs is $500 (ie $2000). Tot $4k pa till she turns 19 (around 14yrs). Then first payout $7-10k. Next year premium less by $500. By the time she turns 22, premium reduced to base only 2k. And only have to pay for another 3yrs. Then 3 options:
i) let the policy stay. Coverage on her life and CI remains. Owner is parent.
ii) pass the policy to her.
iii) terminate the policy and cash out the policy value.
New option - Family3. For 100k life coverage, premium of $8400pa for 10yrs. From 11th yr, 2 options:
i) do nothing, we get payment of $4k pa every year until death $100k (min).
Ii) terminate and get surrender value (break even at 15year).
This can then be treated as a long term retirement fund. Many buy on their child's name for this purpose. As owner of policy, you can then decide to hold, to cash out, or to pass on.
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