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The momentous decision to have a baby sets in motion a chain of events that will impact the rest of your life as a family.

One of the most important things to consider are your finances—as your choices can have significant implications for your future.

Here are five financial tips to help with your baby planning in Hong Kong:

1. Public or Private?

Of course, deciding whether to use Hong Kong’s private or public healthcare systems is a much bigger decision—with more factors than just the financial aspect.

But if you are planning to go private, you need to be aware of all of the potential costs involved at the start. Unforeseen circumstances such as an emergency caesarean can add tens of thousands of dollars to your bill, so you need to be prepared and budget for how you would pay for this.

Is this going to be covered by your insurance? Do you need to budget for some of these costs yourself?

Financial planning is about lists, lists and more lists

 

2. Check Your Medical Insurance

Medical coverage in Hong Kong can differ significantly from policy to policy, be it cover provided by an employer or private medical insurance that you have bought yourself.

If you are planning on using private medical care during the pregnancy then it’s very important to understand what your current insurance will or will not cover you for, and what the limits are on both maternity and birth-related costs. 

You don’t want to receive any nasty surprises when it’s too late to do anything about it!

You don’t want to receive any nasty surprises when it’s too late to do anything about it!

If you intend to obtain private health insurance to cover some expenses, then you need to be aware of ‘waiting periods’—the period of time before you can make a related claim—which may be as much as 12 months.

When these matters are complicated, it can be helpful to consult an expert such as AD Medilink that can advise you on the best plan for your circumstances.

3. Budget Ahead

Having a baby results in a lot of extra expenditure that you may not have considered. While you’re in the planning stages, it may be useful to complete a simple income vs. expenditure analysis.

You may want to consider things such as:

  • How much are you currently spending?
  • What do you anticipate you will spend in the future?
  • What reduction of income may the household experience during maternity or paternity leave?
  • Do you need to move to a larger apartment? What will that cost?
  • Do you have savings set aside to cover unforeseen costs?
Little girl doing homeworkFinancial planning involves costs that go well beyond the birth

 

4. Review Your Protection Cover

The period during baby planning or just post-birth is often the time people realise they need to consider protecting themselves against the worst. 

Employee benefits in Hong Kong are often limited and do not include sufficient—if any—critical illness insurance. Life insurance cover is also typically limited to between just 12 and 48 months of base salary. (Although a lot of employers do offer health insurance, this will cover medical costs but not your loss of income.)

If something happened to you or your partner, would the family be comfortable financially? If you feel you would not be left in the appropriate financial position then you may wish to consider obtaining advice on a suitable form of insurance. 

These things can be tailored to any budget and having some cover is far better than having none at all.

5. Write or Update a Will

Having a baby is an important time to review your existing will, or to have one written.

In Hong Kong, it’s especially important due to the rules of temporary guardianship: If you die without having nominated a guardian, the courts could place your child into a local orphanage until they have nominated a caregiver (which can be time consuming). 

Online ads suggest you can do this yourself, however with the nuances of the rules in Hong Kong and the broader considerations relating to guardians, enduring power of attorney and advanced medical directives, it’s always better to consult and talk these things through with an expert, such as such as Phoenix Wills.

Please note that June has no affiliation to any of the recommended companies in the above article.

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