Life Insurance on a Child with Special Needs: Benefits and Challenges
October 1, 2010
Parents with a special needs child often insure themselves to provide for their child when they have died. A more complicated issue is whether the parents should consider purchasing life insurance on the life of their child to address the possibility that they will outlive their child. Purchasing a life insurance policy on the life of a child with disabilities can provide several benefits for family caregivers. The purpose of this article is to explain these benefits, provide an overview of the application process and describe the types of policies that may be available, while highlighting some of the special considerations that family caregivers should understand.
Benefits of Life Insurance
For caregivers who have foregone career development to provide care to a child with special needs, retirement savings, pension amounts and even Social Security benefits may be adversely affected. A life insurance policy on the life of the child may help to replace the caregiver’s lost wages and retirement accounts at the child’s death. In most cases, when the insured person dies, insurance proceeds will be paid to the designated beneficiaries free of any income tax.
Although it is not pleasant to think about, having a life insurance policy may help cover funeral expenses and make up for lost income opportunities. Before you purchase life insurance on the child with disabilities, you should know…
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by: Hyman G. Darling