When putting insurance policies in place, the first point of reference is always the breadwinner. However, it is so important to realise that none of us stand in isolation and that something happening to any member of your family is going to have a financial impact – including your children.
We explain why it could be sensible to consider trauma cover, health insurance and life insurance for your children.
Trauma cover pays out a lump sum payment in the event of a diagnosis of certain illnesses or specified injuries (more about trauma cover here.) The main advantage of trauma cover is that the lump sum payment frees you up to spend time with your family and potentially cover some medical costs.
Another advantage is if you have a trauma policy with certain providers, your dependant children are automatically covered.
Looking at Partners Life as an example, their policy provides trauma cover of $50,000 to dependent children, regardless of the parent’s sum insured (note, this doesn’t cover congenital conditions). The children can also keep the policy cover when they become independent. To receive this cover, children don’t need to be listed on the policy, and Partners Life don’t charge a premium for their inclusion.
This is a huge benefit of this provider’s trauma policy for parents of dependent children, and a real example of the value of working with an adviser who understands your family situation.
There are a number of providers that include trauma coverage for children in their policies, to varying degrees, so make sure you speak with your adviser to find the right one for you.
With GP visits free to children under 13, getting medical cover for your healthy, active children may seem unnecessary. There are a few important reasons we think it is worth considering.
There are two key ways to look at health insurance for children; caring for them now, and thinking about the future.
The main advantage of health insurance for children while they are young is the quick access to specialist services and expertise, without the stress of having to go on a waiting list.
It also offers an advantage as your children grow. Getting health insurance for your children now means you are setting them up for later in life. With an aging population placing more and more pressure on our health systems, public medical care may look very different in the future.
When applying for insurance as an adult many people also find limits placed on their coverage by pre-existing conditions.
If you insure your children while they are young, fit and healthy, and they keep the policy when they reach 18 or 21 years old (depending on the insurer), they will not have any pre-existing conditions as the cover is already in place. This includes any major conditions or illnesses such as cancer or heart problems, but also smaller things such as allergies or asthma.
Life insurance for children is something that no parent ever wants to think about, but it is worth discussing.
It is uncommon to get life insurance for children, but it is available. How much you can insure children for is very limited but is generally enough to cover funeral costs.
The reason it is worth considering is that insured children can take over the policy when they come of age and will have that cover in place. To increase the cover, they will need to go through the normal application process, but they are assured of the original cover, regardless of any medical conditions that have developed since they were originally insured.
A last note to keep in mind is that most insurance policies don’t cover congenital conditions.
A congenital condition is something that you are born with, whereas a pre-existing condition is something that you have developed since birth. For example, a tongue-tie correction needed on a baby will generally not be covered, as that is something they were born with. A child that needs grommets inserted (one of the most common procedures for children, which helps prevent persistent ear infections, but often has long waiting lists at public hospitals) can be covered.
If you want to know more about the options for insurance cover for children, or check how your current policies provide for your family, get in touch with one of our advisers.
Here are a few reviews from some of our existing clients around New Zealand