Protecting your children with their own insurance

 In Children, Education, Health, Insurance

Protecting your most precious asset – your child

Along with the overwhelming happiness, being a parent also comes with great responsibility.

Everyone wants to provide their children with the very best in life. We want to give them the best quality of education, provide them with the best medical solutions and doctors when they suffer from illness or injuries. In the event that your child falls ill – do you have a back-up of funds to pay the necessary costs associate with caring for your child and importantly if you need to take time off to care for a sick child?

Did you know?

  • Over 300,000 children aged between 0-14 were seen in casualty 2004/05 ^1
  • 200,000 children fall critically ill each year in Australia ^2
  • In 1999-2000, 7,094 children aged 0-14 years were hospitalised for cancer

As much as we wish to protect our children by wrapping them with cotton wool; unfortunately we cannot safeguard them against unforeseen illnesses.

Children’s Trauma Insurance is often not considered as part of a protection plan but it is something as a mother and an experienced financial planner I am passionate about discussing with all my clients.  It typically offers cover for children aged 2 – 15 across a range of illnesses including meningitis, cancers, blood disorders, loss of sight, major organ and bone diseases, as well as covering some serious accidents and death. It can sometimes be included as part of an adult trauma policy or can be purchased independently.

The experience of Mary and James

A personal experience very dear to me is the story of my clients Mary and James, who came to me for financial advice as they were struggling with their cash flow. After visiting them I came to the understanding that Mary was unable to work full time after taking care of their daughter who was diagnosed with bone disease at age 4. Needless to say that they have a $450k mortgage commitment, and had ongoing medical and doctors expenses to cover. James was the sole income earner, working full time on a salary of $60k p.a, which was barely enough to cover the families ongoing expenses. Mary cared for Madeline full time as well as her younger sister Nora, who was only 6 months old.

After taking them through the financial planning process, I discovered that Mary had taken out a children’s trauma policy for Madeline when she was born, which meant her medical expenses could be claimed. I quickly got in touch with the insurer and applied for the trauma claim for Madeline. In this case, the family was lucky to have a fantastic financial result as Madeline was covered for $150k. After the claim had been accepted, Mary was in tears as it meant a huge financial burden was alieviated. Realizing that her younger child Nora had no cover in place, Mary also made the decision of getting Nora covered for childrens trauma insurance for total peace of mind.

What does children’s trauma typically cover?

  • Overseas treatment costs
  • Home nursing care
  • Home or car modifications
  • Meeting financial commitments if you are not able to work whilst caring for your child

By having a protection plan for your children in place, it means a safety net to make sure you have enough funds to take the time you need to spend with your family.

Does Private Health Insurance cover me?

Typical health insurance will only cover hospital and some medical/expenses and benefits up to a threshold – it may exclude coverage for top surgeons, atypical treatment, overseas treatment, nursing/rehabilitation and not the cost of the parent/carer’s time off work.

Help your child’s insurance into the future

Providing your child with trauma insurance as a child can help to provide lifetime coverage where a new medical condition is presented. For example if your child was diagnosed with Type 1 diabetes but covered for children’s trauma prior to diagnosis and kept that going until adult age they could continue to secure trauma insurance  which is usually not available to most type one diabetics due to the incidence of complications.

Article written by Joanna Sun, Senior Financial Planner at Oak Financial Planning.

You can read more about Joanna by viewing her profile here

 

Sources

1 AIHW, Australian Hospital Statistics 2004-05.

2 AIHW and Australasian Association of Cancer Registries, Cancer in Australia in 2001, 2004.

3 AIHW and Australasian Association of Cancer Registries, Cancer in Australia in 2001, 2004.

Valkyrie Private Wealth Management Pty Ltd ABN 78 126 751 335, trading as Oak Financial Planning is an Authorised Representative and Credit Representative of AMP Financial Planning Pty Limited, Australian Financial Services Licence and Australian Credit Licensee, 232706 (AFSL), 232706 (ACL).

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