Hi dendii, Bigoya
Thanks for your replies. I've seen your posts on insurance before and I've always felt your posts are valuable and reasoned. The replies you have posted me have taught me something new as well. I'm still new to the forum functionalities, so I can't do all the fancy quote thingies but I shall address your comments as best as I can.
It appears we agree on the majority of what's being discussed here. Whole Life and Term Life not needed for kids, but for their parents. What intrigued me was the CI factor as well as the concept of "future uninsurability" which is something I have not thought about before.
But first I'd like to point out that the "what-ifs" you've mentioned is a rabbit hole that once you get in, it's hard to get out. Life is tough and unpredictable. We cannot insure every risk. As mentioned earlier, there does not seem to be stats on tpd/ci/death for 16 year olds and below, nor for loss of limbs or eyesight and things like that. I say this not to make light of the situation, but that we should focus on reasonable risks. This goes back to the risk appetite that we all talked about earlier, so yes to each their own.
But I'd like you to think about all this "what-if" analysis in the context of new parents. They are carrying their new little bundle of joy and have likely sworn a blood oath to protect this kid or die trying. And along comes agents citing what-if-this, what-if-that and it's not hard to imagine a scenario of over-insuring. To put it bluntly, all your talk of what-ifs, while well-meaning by principled agents, would be tantamount to fear-mongering when done by less ethical agents.
dendii mentioned just because someone doesn't smoke, drink etc doesn't mean he shouldn't be insured. True, but the understanding is that in this scenario, we are usually talking about an economically active and viable adult with some form of financial commitment. Not a kid in kindergarten or in secondary school.
But if parents want to get CI, then sure, that's their call if they can afford it. If some innovative insurance firm can separate CI from death, and results in a lower premium, more power to them. I want to highlight to Bigoya at this point that not all families can afford that extra $100 in premium every month. And $68k or $75k 20 years from now is nothing to sneeze at; that's college tuition for the kid right there. Unfortunately, the less well-off have to make this choice and they are more likely to be persuaded of the need for insurance because they may not know better.
People with more earnings power either know better, or they can self-insure to some extent, or they can easily afford to pay this extra premium. 天下父母心, all parents want the best for their children, even if it means self-sacrifice and long-term sub-optimal choices. Please don't prey on that, is all I'm saying.
Future uninsurability is the thing I have learnt from Bigoya and dendii today. I will have a long hard think about it because it is probably the only strong argument I've heard so far for insuring from birth. If I know my family is genetically predisposed towards some kind of disease, I would want to insure from birth. But I'm guessing insurance companies are nobody's fools and one would have to declare something like this upfront or they will nullify the insurance claim. But again, I go back to my earlier point of how likely is this scenario? How many uninsurable people in their early 20s do we come across? My guess is not many, and the ones that are, while tragic, are more the exception than the rule. Again, back to one's own risk appetite and financial means to cope. And the agent's ability to stir up the most terrifying imagery of uninsurability just by hinting, "but what if..."
Anyway, don't mean to detract away from TS's post. I too am interested to learn about options for H&S and accident insurance plans for toddlers. Thanks again Bigoya and dendii, looking forward to learning more from you both.
Thanks for the compliment wealth_farmer, I've seen your discussions on investing and they are pretty good posts too.
By the way, to quote a post, you could just click on the "quote" button right below the particular post and type away.
I guess if WSH doesn't enforce workplace to be equipped with fire-extinguishers, those extinguishers salesmen would resort to selling with "what-ifs" too. This is perhaps how we can uncover blind spots for our clients, just like how we presented a brand new idea to you which otherwise you'd have overlooked.
The topic of insurance used to be a taboo. Agents often mention terms like "death", "illnesses", "car accidents" in the past and the older generations would be stretching out all fours touching and hugging wood. I'm personally curious why the current generations are still as
"pantang". This are just some of the things you can't avoid discussing about, and while it may not sound pleasant, no one should take it to heart, including parents who've received their bundle of joy.
I mean, as a driving instructor who often mentor his students to drive, you can't just expect him to say "you have to check your blind spot" without explaining what exactly to look out for, and what could be the consequences of not watching out. Please don't just take it as fear-mongering. I believe we are not in a generation that are still prone to such scare tactics (at least for the majority who could think logically).
Sure, we can't insure every sort of risks. Why? Cost of premiums.
But if premiums comes cheap...
You can get a Term policy from AXA after your baby is 1mth old, not sure about other insurers's criteria but I'm sure there won't be any issue.
For a 10yr renewable Term + accelerated CI coverage of $300k, it'd cost you $341.28/yr (based on 31yo, M, non-smoker).
And assuming that with your cash flow you could afford it, what seems to be the problem?
Most importantly, it's still back to prioritizing, which is up to the client to weigh himself.
There are standalone CIs as you suggested, but I guess you haven't came across my other posts stating that base on AXA's quote, an accelerated-from-Death CI actually cost much lesser than a standalone CI with the same CI sum assured, with the possibility of claiming from death.
From insurance agents/financial advisers point of view, it is undeniable that we see more cases of misfortunes than the general folks. I can't deny there are unethical agents making up their own convincing stories, but don't discount true case studies too. Just like a doctor meets every kind of sick patients for every single appointments, we just see them every once in a while.
Compared to the common folks? You guys won't even be able to tell if you bump into a seemingly healthy individual but got rejected by insurance due to hidden physical issues, and they could be one of those kids playing in the playground right across your block.
In my personal point of view, if a person/couple/family, have any sort of knowledge/interest in doing their own investment, they'd be able to evaluate how much they'd need an insurance instead of buying something based on an agent's persuasion. To the less savvy peeps, they are usually the ones who'd either choose to be "protected" with financial products, or #yolo self-insure with their peanuts.
End of the day, it still lies with how an agent, ethical or unethical, decides to sell/con his preys.
Lastly, if your family has a history of diabetes/heart attack/cancer, etc, it doesn't mean you'd certainly be loaded, excluded or rejected. Underwritings doesn't go to such extremes.
