Date: 18 Apr 2010 Comments: 4 so far

Many parents, especially new age parents these days are very careful with what they want for their kids.

Two area of concern:
1.Medical coverage
2.Saving for tertiary education

Medical coverage
It is very necessary to get the right medical cover for hospitalization because kids are prone to injuries and to cover hospital expenses as critical ill child can cause considerable financial strain.
Identify the difference and the importance of:
1.Critical illnesses and disability (lump sum payout to assist financially for outpatient care expenses)
2.Personal accident (% on sum assured lump sum payout to assist financially for outpatient care expenses)
3.Hospital expenses ( important to take note whether it covers deductible and co-insurance as well)
4. Hospital Income ( income replacement)

Saving for tertiary education
Can save via regular investment plan or an endowment or combination of both depending on individual needs and risk profile.
Regular investing plan has been historically proven to give better returns and provides flexibility. Average annual MSCI Global Index yield between 5% t0 9% where endowment only gives around 3.8% on maturity.

It is important to set a provision for your kids education but however keep it open on who is able to utilize this fund when the time comes because there are possibility they might not need it and you might need it more than them. In an extreme case for education expenses you can always get loan but not for retirement.
Last but not least is to discuss with financial adviser not just on the policy features but also on who is suppose to be the owner, who is life insured and whether are there nominations required etc.