Doubt no more. If you can afford it, upgrade your baby's hospitalisation insurance from basic MediShield to an enhanced Shield plan.

The plan should also be 'as charged', without sub-limits on ward charges or surgery each day.

Financial advisers say that basic MediShield is meant for use in class B2 and C wards in public hospitals and will not be adequate for treatment in private wards and hospitals.

Said Mr Patrick Lim, the associate director of financial advisory firm PromiseLand Independent and a member of the Association of Financial Advisers: 'Of course having basic MediShield is still better than not having anything at all. But you are seriously compromising your options by not upgrading.'

Premiums for the enhanced plans are, of course, higher. Basic MediShield for a child costs only $30 a year. An enhanced Shield plan can cost five times as much.

The experts recommend that an upgrade be done for the baby right from the start.

You may think, what's the hurry? But the longer you put it off, the higher the risk of your child developing a medical condition that may make him ineligible for an upgrade to a better plan later, said Mr Eddy Cheong, who heads independent financial advisory firm Providend's family office services.

The next question: Which plan should you choose?

None of the five Shield plan insurers - AIA, Aviva, Great Eastern, NTUC and Prudential - offer any Shield plan that is just for children.

But recently, some insurers have introduced new features in their plans to attract parents to buy these policies for their children.

Child-friendly features

Great Eastern is the only insurer among the five to cover congenital illnesses as long as they do not surface in the first two years after the policy is bought.

This could be very helpful for parents who are worried their children may have such problems, said Mr Cheong.

'It's not guaranteed, but at least you have a chance of having a congenital condition covered,' he added.

But chances are that a congenital disease will show up early in life, he cautioned.

Parents should keep in mind that congenital diseases are not that common, occurring in perhaps 1 per cent of all babies, Mr Lim noted.

Aviva has also recently tried to draw more cost-conscious parents with a 'buy two, get one or more free' offer.

If both parents of a child are insured under Aviva's MyShield Plan 1 or 2, all their children will be covered under MyShield Plan 2 for free up till age 20.

Plan 2 covers medical treatment in public hospitals, but not private.

Each year, the premium for a child under Plan 2 is $142, which works out to more than $2,800 saved per child.

That amounts to large savings especially if you have many children, but parents have to be comfortable with having their children treated in public hospitals, MrCheong said.

Buying a rider

Another important factor to look at is buying a rider to cover the deductible and co-insurance portion of each hospital bill.

For each bill, a minimum sum known as the deductible and a certain percentage of the balance, called co-insurance, will not be taken care of by the Shield plan.

Parents can take up a rider with all the Shield plans, except Aviva's, that will cover this entire amount.

Aviva's rider covers the co-insurance but not the deductible, so premiums for its rider is cheaper than for those of other plans.

For example, the total premium for an Aviva rider from one to 100 years old is $39,000, but the premium is $100,000 for Prudential's rider.

To end up spending the same $100,000, someone on the Aviva rider would need to be hospitalised some 20 times before the amount they pay for deductibles makes up the $61,000 difference, Mr Lim said.

Getting the Aviva plan means that 'you won't be pre-paying for something you may never use so many times,' he added.

Mr Cheong, however, preferred the riders from the other companies.

He said that as hospital bills for most people tend to be small - lower than the deductible of $3,000 each time - someone with an Aviva rider would not be able to claim very often.

But under any other Shield plan with a rider, patients do not have to pay a cent even for small bills.

Still, any plan you choose will be a good bargain.

Mr Cheong said: 'Everyone should definitely buy a Shield plan. They are cheap and good. No other private plans can offer such prices.'

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E-mail: huichieh@sph.com.sg

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