Pros and cons of children's cover

This article is part of
Guide to family protection

Mr Nash explains: “Policyholders with no current children, grown-up children or those who will never have children are effectively paying for an element of cover they will never be able to claim on.”

The Association of British Insurers (ABI) has set out what insurers should be stating clearly on their forms so advisers and clients know what will not be covered.

Its 2014 statement of best practice for CIC policies, for example, states forms should use clear model wording.  

NHS vs private

It needs to be said children in the UK have been, and will be looked after well by the National Health Service (NHS) in most cases. 

The NHS does not charge you to give birth – unlike the US – and for the vast majority of children’s illnesses, the NHS will provide care, compliments of the taxpayer. 

However, there may be additional treatments needed that are not available on the NHS, or there may be such a long waiting list that the parent or guardian believes going private will give the child the best possible chance. 

Moreover, many after-care treatments, such as counselling or ongoing physiotherapy, will need to be funded by the family.

Some plans do offer a free hospitalisation benefit for children, but again this is limited in term and cover level.

And just because the NHS has always looked after the UK ‘from cradle to grave’ (or from conception to cremation in some cases), does not mean the future will always be so bright. 

Consider the political climate: the NHS is getting stretched in terms of resources and may not be able to continue providing what it has done in the past.

Therefore, it is understandable why parents might consider purchasing additional protection to be a step too far.

However, at the least, advisers should talk to clients about having their own policies with automatic cover built in for their children, regardless of whether they buy additional cover specifically for their offspring.