Questions You May Ask during Pregnancy (Using CPF, Insurance and others)

“The problem is not the problem. The problem is we don’t know what is the problem”

I first learnt about this phrase from a business coach.  He used it to explain to his clientele of mainly business owners and entrepreneurs that their biggest business challenge lies not in finding solutions to their problems but rather in defining what exactly the problem to solve is.

From my personal experience (I have 2 lovely daughters), having a baby is like starting a business.  You begin with an idea (or what is known as “Vision” in the business world) of how it should be, you understand that the initial years will be a lot of hard work and from the time the business idea takes root, there will be endless decisions to make.

For an entrepreneur, every day is about making decisions and the quality of those decisions will determine if the business succeeds or fails.  Because every business is different, there are very little reference points to guarantee that a decision will be correct.  Similarly for a parent, every day is about making decisions and the quality of those decisions will determine parenting success or failure.

Because every child is unique, you cannot just do what your friend had done for their child, copy the same and expect success.

One thing is quite clear though, financial management is essential and is probably one of the first things to get right for the endeavor to be successful.  When it comes to having a baby, the financial management begins during pregnancy and this is when the considerations may become complex.  There are so many things to know, most of them are unfamiliar and a wrong decision (or even a delay in making a decision) may be costly.

I have built what I believe to be a useful resource of a list of common financial considerations during pregnancy and I hope that the following topics written in a question and answer format will help you to get prepared as you begin tackling the millions of financial decisions (that’s how it’ll feels like) ahead.

A quick disclaimer before you continue reading, this list is not exhaustive and may probably never be but do bookmark this page and come back often as I will update the information whenever I come across something new that’s useful.

Uses for CPF-Medisave

1. What pregnancy related costs can I use my CPF-Medisave to pay for?

CPF-Medisave can be used to pay for expenses incurred during delivery and pre-delivery expenses such as consultations, ultrasounds, tests, medication…etc under the “Medisave Maternity Package”.  (Source: CPF Board)

2. Can I use my spouse’s CPF-Medisave?

Yes, your spouse’s CPF-Medisave can be used to pay for pregnancy related costs.  Besides your spouse’s Medisave, immediate family member’s Medisave can be used as well.

3. Are there any limits to the use of CPF-Medisave when it comes to pregnancy related costs?

There are limits to the use of CPF-Medisave.  You can view the withdrawal limits here.

Hospitalization Insurance

4. Can hospitalization plans such as MediShield Life and Integrated Plans (“IPs”) cover the costs of normal childbirth?

Maternity and pregnancy expenses are not covered under MediShield Life and generally speaking, pregnancy related hospitalization are excluded under Integrated Plans.  However, some Integrated Plans provide cover for specific pregnancy related complications which should not be confused with normal childbirth.

Here is a sample of an exclusion clause in such hospitalization insurance policies:

The following treatment items, procedures, conditions, activities and their related conditions are not covered under your policy:

Pregnancy, childbirth, miscarriage, abortion or termination of pregnancy, or any form of related stay in hospital or treatment (unless we cover this under pregnancy complications benefit)”

5. Can my company’s hospitalization plan (i.e. employee benefit’s insurance) cover the costs of normal childbirth?

Generally, most employee benefits hospitalization insurance plans do not cover normal childbirth. However, there are some types of plans that covers pregnancy and delivery charges which need to be purchased before the start of pregnancy for the pregnancy related coverage to be effective.

6. If I need an emergency C-section, can I claim from my hospitalization plan?

Generally, childbirth (including emergency C-section) is excluded in most personal hospitalization plans, unless this is due to one of the specific pregnancy related complications that are covered in the plan.

7. If I have to have a cyst removed during pregnancy, can it be covered?

Yes, the cyst removal if deemed to be medically necessary, can be covered by your personal hospitalization plans such as IPs even if the cyst is removed during child birth.  I have come across successful claims for such scenarios.

Pregnancy Insurance

8. What is pregnancy insurance?

It is a type of insurance to buy during pregnancy to provide financial protection for both the mother and the soon-to-be-born child.  You can learn more about pregnancy insurance here.

9. When should I get covered for pregnancy insurance?

Pregnancy insurance is offered from the 13th week to 40th week of pregnancy.  In my opinion, the best time to purchase pregnancy insurance is after the “Financial Budgeting Review” meeting with your spouse and perhaps, your financial planner at around the 20th week of pregnancy.

This is when the pregnancy has stabilized, with most of the medical checkups done and the mummy is filled with the pregnancy glow and a small baby bump to start shopping for baby stuff…including insurance.

You can use this “Baby Budget Checklist” that I’ve done up to estimate the amount of cash required from 20 weeks pregnancy to baby first month to help in your planning.

(NOTE: Get our Baby Budget Checklist to find out the estimated costs of big ticket items from 20 weeks pregnancy to baby 1st month. Get your checklist here)

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10. Should I consider the stand-alone or bundling options?

This really depends on your unique preference.  It’s usually a decision between budget, desire to start planning early and the weight you place behind guaranteeing the insurability of the child.  It’s a good idea to speak to a financial planner about this to understand the differences and implications.

Travel Insurance

11. Does travel insurance cover pregnancy related claims when I travel?

The normal type of travel insurance do not cover pregnancy related claims.  If you want to have pregnancy related claims covered for your “babymoon”, look for travel insurance plans that extends the insurance coverage for pregnancy.

12. What should I look out for in purchasing travel insurance when I am pregnant?

Any trip will bring with it additional risks especially during pregnancy and the countries that you are visiting will be a factor in the risk level you may encounter. If you are concerned or just want to be on the safe side, you might need to consider a comprehensive travel insurance plan. Another factor to consider is whether you have any pre-existing conditions besides pregnancy. Some travel insurance cover pre-existing conditions while others don’t.

Seek the advice of a financial planner who is able to recommend on a wide range of travel insurance on this.  For this particular need, I do not recommend Do-It-Yourself for the consequence of buying the wrong product may be costly.

Other considerations

Congenital Conditions

13. Can the child be covered against congenital conditions even before birth?

Yes, there are 2 main types of insurance that can provide coverage for the child against congenital conditions even before birth.

a. CPF Integrated Plans – Some integrated plans provide hospitalization coverage for congenital conditions if the mother is an existing policyholder.

b. Pregnancy Insurance – Provides insurance coverage for both pregnancy complications and congenital conditions such as club foot, cleft lip, cerebral palsy…etc.

Budgeting for Insurance

14. What is a recommended amount to set aside to buy insurance when the baby is born?

A monthly budget of around $200 to $250 will usually be sufficient to get a good level of coverage.

If the family has additional budget, it can be used to plan for education funding.

Being able to build the plan by selecting from a range of insurance companies and products will be helpful to design a comprehensive plan and perhaps, stretch the limited budget available.  For my own children, they have insurance policies from 4 different insurance companies!

There are many decisions to make when the pregnancy begins.  From my experience, there will be a few major ones and many minor ones even though you may feel that every decision is a major one right now.  Don’t worry about that because it is normal and natural to feel this way.  However, you must remember that if you can recognize which are the important decisions and get them right, the others will fall in place.

(NOTE: Get our Baby Budget Checklist to find out the estimated costs of big ticket items from 20 weeks pregnancy to baby 1st month. Get your checklist here)

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Let me end by sharing the most important decision I’ve made when I first learnt that I’m having a baby.  It is not which gynaecologist to see, what insurance to buy or should I get a confinement lady.  It is that no matter what, I will enjoy the baby process every step of the way and that is my wish for you too.

Enjoy the present!

Article by Lee Meng

Email: meng.lee@proinvest.com.sg

<strong>Lee Meng </strong>(FChFP, AFC)
Lee Meng (FChFP, AFC)Financial Services Manager

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