I’m not a professional, but I take insurance planning for my family very seriously. Here’s my highly personal and subjective approach to buying insurance for children:

🐒 Must-have: Hospitalisation Insurance

Having accompanied multiple family members through hospital stays, and having personally experienced being laid off, I deeply understand how essential basic hospitalisation coverage is. I’ve shared many stories before, so I won’t repeat them here.

🐵 Strongly recommended: Critical Illness Insurance

Especially important for sandwich generation, families with higher incomes but limited savings. For me, my child’s critical illness coverage is not about covering medical costs or securing the child’s future — it’s about replacing income lost when a parent needs to stop working to provide care if the kid is in serious illness. Since active income is our family’s main cash flow and key to reaching financial goals, this insurance provides a safety net. If the child gets seriously ill and a parent has to reduce or stop working, this helps ensure our household income continues. To me, this is part of our overall financial planning.

🙉 Optional: Accident Insurance

Not essential.

I canceled my child’s accident insurance this year, partly because my company insurance already covers most outpatient expenses for dependents — including pediatric emergencies, GP, and specialist visits. The annual limit isn’t high, but it’s been more than enough. Over the past year or two, we’ve claimed expenses for fevers, hand-foot-and-mouth disease, and injuries due to accidental falls through company coverage. The accident insurance didn’t come into play at all.

Sure, accident insurance includes some extra coverage like hospital stays or fractures, but the benefit limits are low. To me, it feels like “nice to have” coverage — helpful if something happens, but not essential or financially burdensome if you don’t have it. For this kind of “cherry on top” policy, I don’t see the need. Since accident insurance has low entry barriers, we can always add it later if needed.

🙈 Depends on your financial literacy: Education Savings Plan

If your family has good saving and investing habits, directly investing in a stock/bond portfolio is much cheaper, more flexible, and more efficient than using insurance-based savings plans.

🙊 Unnecessary: Life Insurance

Whole life insurance is expensive as a savings product and less effective than term life for death coverage. Its main role is in estate planning, which is more applicable to wealthy families with large inheritance needs. A child has no dependents and no need for life insurance. I’d rather teach my child how and when to buy the right insurance in the future, and how to use different financial tools wisely — give them the fishing rod, not the fish.

In summary

Insurance budgets should go where they matter most — covering events that would have a major financial impact on the household. Any non-essential spending is better allocated to smart saving and investing, which offers higher returns and greater flexibility.