Insurance for infants

In the last few months, we've touched base with a couple of insurance agents, trying to see what sort of life or medical policy we should buy for Sonny.

Some folks might find it rather morbid to be talking about insuring an infant. But there's a definite logic to doing so. Most pertinently, insurance becomes increasingly expensive as we advance through life because the chances of something very serious happening to us increase over time. Which means, of course, that we are increasingly likely to slap our insurance company with a claim. AIG, AXA, Prudential and their like also take into account our prior medical history in deciding the premium (that is, the amount of money to be regularly paid to keep the policy from lapsing). If someone has what are called 'pre-existing medical conditions', these will affect either how much he pays or increase the likelihood that the company will decide it doesn't want to insure him at all. In the case of medical insurance, any such condition runs the risk of being excluded: If it sends you to hospital (or worse), not one red cent is paid out.

A baby starts off with a major advantage since he is much less likely to have any sort of adverse medical history: As a result, he's less likely to attract a stiff premium, or suffer exclusions. Once the policy takes effect, nasty surprises won't be a problem. That is, of course, unless the insurance company goes bust or there is some fine print that can be quoted and used to deny a claim. If you believe half the stuff to read on the Internet (use Mr Google liberally, but wear a bib to catch the spittle and invective that will spring from your screen), an insurance company is about as trustworthy as a car with no engine.

Having no background in finance ourselves, the best advice we've gleaned from our research is that it may be best to to opt for basic policies, with fewer bells and whistles, as a base. If you are one of those who likes having multiple policies, with an "investment-linked" component, cash bonus features and what have you, you might keep in mind that these will potentially erode your policy's subsidiary function as a form of forced, long-term savings.

Your best bet might just be asking around till you nail down an insurance agent that comes with multiple recommendations, and with whom you are comfortable discussing your options. These days, agents double up as financial advisers and will try and sell you any number of products. Those that don't seem to be trying to milk you for every spare dollar are the ones you want to give proper consideration. One last thing: Never lie about medical conditions. You can be found out - and the consequences won't be pretty.