Insuring a most precious life

A child with a life-threatening illness is a parent’s worst nightmare. Affording the medical treatment should be the least of their worries, which is why many parents are considering children’s insurance.

It’s generally accepted that trauma insurance is the domain of adults – after all, we’re living longer and many illnesses previously deemed terminal are now curable.

Chronic illnesses in children are noteworthy because:

  • they threaten the child’s normal development progress,
  • costs are magnified by duration and ongoing treatment (childhood conditions often require life-long monitoring and management); and
  • significant impacts on the family’s emotional, financial and psychological wellbeing.

For many, a child suffering a chronic or terminal illness is unthinkable, let alone a topic for discussion. Consequently, children’s insurance policies are not widely understood.

Children’s trauma insurance, sometimes called child critical Illness, provides a lump sum to cover expenses if a child suffers a chronic illness or dies. Having access to additional funds might mean the difference between standard medical care and being able to afford top specialists, medications and rehabilitation not ordinarily covered by Medicare or private health insurers.

When children are ill, parents may take time off work and arrange alternative care for other children. This places an unplanned burden on the family budget which a lump sum paid on diagnosis, would help alleviate.

In most cases, child insurance cannot be purchased as a separate policy; it is generally offered as an option when adult trauma insurance is purchased, and in most cases the sum insured cannot exceed the sum insured on the adult policy.

Child policies cover a range of trauma events for children usually between 2 and 20 years of age, and as with other forms of insurance, pre-existing conditions are excluded. For this reason, it’s advisable to consider children’s insurance when your child is born, or soon after.

As another option, some adult trauma policies offer up to $10,000 in child cover as a premium-free benefit. Although this is only a small amount, it should be considered when looking at various policies on offer.

When contemplating insurance for your child, ask your adviser about a continuation option. This option converts your child’s policy to an adult contract when they reach a certain age – particularly relevant if the child suffers a lifelong condition.

Insurance companies maintain their own list of insurable illnesses and injuries so it pays to shop around and compare policies. Additionally, insurers often apply their own medical definitions and limitations to illnesses. Make sure you read the fine print on all policy terms and conditions and ask questions if you’re not sure.

All parents anticipate bumps and scrapes as children grow and explore. But no parent wants to consider something more serious. If the unthinkable were to happen, knowing you could afford the best possible care offers unbeatable peace of mind.

Contact your financial adviser if you would like to know more about children’s trauma insurance.
 

Sources:
a)     Not for publication
www.aihw.gov.au Selected chronic diseases among Australia’s children
www.multicover.com.au Children’s trauma insurance
www.lifebroker.com.au Trauma insurance/child cover
www.asteron.com.au Asteron life complete trauma cover
b)    
For publication