Life is full of uncertainties. How are you going to support your child? Want to buy an insurance? What can we buy for our child or ourselves?
If you're a parent, you're concerned about your child's emotional well-being, physical health, and financial security. When you're the parent of a child with special needs, these concerns are magnified. Of course, physical and mental disabilities can strike at any age, and the person with special needs may not be a child forever.
Some parents regularly put aside a sum for their children's education, either into a savings account or a unit trust. Others expect to rely on their CPF savings which can be withdrawn under the Education Scheme. However, note that CPF funds can only be used for local studies and have to be repaid with interest within 10 years.
A number of banks offer savings accounts for children. However, only POSBank's First Account offers an education grant along with the savings account. If the parent holding the account in trust for the child dies or is disabled, the bank pays an education grant to the child - $100 monthly from age seven to 12 years and $200 monthly from 13 to 18. There are conditions though. For example, the child has to be below five years old to open this account, and under six years old when an accident happens to the parent.
Almost all the major insurance firms here offer some form of education policy. Some, like NTUC Income and Prudential, offer specific policies for children's education, while others like John Hancock, GE Life and AIA tailor endowment policies to fit their client's needs.
An education policy is essentially an endowment policy, where the owner pays premiums for the term of the policy, which may be from 10 to 24 years, and receives a lump sum at maturity. Some of the policies pay out a sum of money once every few years, normally three years.
The main benefit of such an endowment policy is the coverage and payer security that it provides. If the parent dies, is permanently disabled or is struck with a major illness, all future premiums of the policy will be waived, and the child gets the amount insured at the end of the policy.
INCOME family insurance plan?
HSBC Junior FirstCare? Can our special child buy?
NEVER MAKE A MINOR YOUR BENEFICIARY. No life insurance company will write a cheque to a juvenile. If you name your child as the beneficiary, you should appoint a trustee (usually someone you know and trust) to receive the share of the insurance proceeds on your child's behalf if he has not reached 21 years at the time of your death. Whoever you have appointed as the trustee can use the funds to take care of your child according to the directives you've laid out.
More info to digest:
Which Health Insurance to buy? When ill health strikes
Enhancing the Financial Security of Persons with Special Needs SG
In planning for the future of your child or dependent, remember that you are the primary expert, but you may also need to turn to a number of other experts for assistance on such things as special needs estate planning. Though many of these issues can seem overwhelming, it is important you take the time with those experts today to provide for your child's tomorrow.