Investment-Linked Funds

Parents, Priorities and Protection

27 September 2021

Parents, Priorities

& Protection

Parenthood can be the most beautiful phase of one’s life. A newborn child can bring much happiness to the whole family. However, such happiness also comes with responsibilities and having a baby is definitely not cheap.

In fact, it is estimated that the cost of raising a child from the point of birth to graduating university is somewhere between RM400,000 to RM1.1 million in 2016. So, when you’re getting ready to embark on this exciting journey, preparation is key. But how do you prepare and prioritise for the different stages of parenting?

For New Parents

Damon and Shannon are about to have their first baby but they are concerned about the financial aspect of having a newborn, especially since they want to provide her with a good life.

This is why drafting a pre-baby budget is important, considering all medical expenses that might occur. They’ll have to do a proper calculation of how their income will be affected by the new addition and adjust their budget accordingly.

Starting a separate savings account for the child can also be a good move. They should also consider a protection plan for their baby, ensuring she gets sufficient protection from pregnancy onwards.

AIA’s newest child solution, A-Plus BabyCare Xtra provides a holistic protection plan from those initial months of pregnancy to the crucial years of infancy.

A-Plus BabyCare Xtra

It covers expecting mothers against pregnancy complications, death and death of foetus due to childbirth from the 13^th week of pregnancy onwards.

Enjoy in-patient care within 30 days from birth if your newborn is admitted to the Neonatal Intensive Care Unit / Intensive Care Unit / High Dependency Unit.

It also includes infant care when your baby is admitted to a hospital for phototherapy treatment due to neonatal jaundice.

A-Life Joy Xtra

They can grow the money that they want to set aside for Mikael’s education with A-Plus ScholarSaver, which also acts as a university start-up booster when he turns 18.

Joining AIA Vitality also allows them access to the unique Vitality Joy Wallet feature where they can enjoy up to RM100 yearly for child vaccination, dental and optical benefits.

As parents, they will also be protected with financial support of a lump sum benefit in the event of Death and Total Permanent Disability before the child hits the age of 25.

For Parents Of
Young Children

Amesh and Ranjini are parents to five-year-old Mikael. They understand the importance of education for their child’s future, and they estimate that they’ll have another 13 to 15 years to save up for the huge university bill that Mikael will rack up when the time comes.

Additionally, medical cost is something that they have to factor in as well, just in case. All of this can sound overwhelming despite Amesh and Ranjini being working parents of a modest household.

Therefore, a protection plan like A-Life Joy Xtra which provides an all-in-one protection and savings plan for children can be a great way to kick-start a fund for the future.

For Those With Older Children

One of Robert’s biggest fears is that the older he gets, the more of a burden he might be to his four children. Therefore, a comfortable, secure, and fun retirement is something he seeks for peace of mind.

In order to do that, retirement planning becomes crucial and accounts like AIA PRS is a great way to boost retirement savings.

AIA PRS

With AIA PRS, Robert has flexibility in the choice of funds he wants to invest in and he can even switch them around based on his risk appetite.

He can also invest as and when he wishes with no fixed amounts or intervals as it allows him to invest from as low as RM100 for maximum affordability.

Robert can also enjoy an individual tax relief of up to RM3,000 until 2025.

A-Life Wealth Builder

For the Chongs, an investment-linked plan like the A-Life Wealth Builder, that provides a high coverage amount and a financial safety net after they are no longer around is something that fits their vision.

With both Wealth Rewards and Wealth Booster benefits, the plan rewards them up to 6 times of the rewards payout when they save more, save longer and stay financially disciplined.

Beyond Retirement

Mr and Mrs Chong believe that the best legacy one can leave behind for your children is protection, ensuring their future is taken care of. For them, it is never too early to start a conversation about the day when they won’t be around.

This is because they want their loved ones to be taken care of financially and one of the ways to ensure that is through life insurance.

Most would agree that being parents is quite possibly one of the most rewarding journeys in life, albeit challenging. It takes a lot of effort to raise another human being, and when you add finances to the mix, it can be quite a headache. But with preparation, patience and the above suggestions, we hope it helps you with whatever that comes your way.

All the best with your lovely bundle of joy!

REFERENCES

https://www.aia.com.my/en/what-matters/finance/cost-of-raising-a-child-in-malaysia.html

https://www.enterprisewealth.com/assets/articles/Baby-Makes-Three.pdf

https://www.smartaboutmoney.org/Topics/Family-and-Finances/Kids-and-Money/New-Parents-Can-Plan-for-Financial-Success

https://havenlife.com/blog/new-baby-financial-checklist/

https://www.forbes.com/sites/janetberryjohnson/2018/06/27/11-financial-moves-every-new-parent-should-make/?sh=4baffaf6ceca