Establishing Life Insurance Now to Care for Disabled Children Later
Many people buy life insurance to cover the period of time they will have dependents. Dependents include children or others who depend on the income, housing and other resources provided by another person. Since children depend on their parents, it’s important to leave them financial support should you, the parent, die.
Having a disabled child can further complicate this issue. They will often need financial support a lot longer than the average child. Therefore, your life insurance benefits can make a huge impact on their ability to live comfortably.
Children with disabilities often need lifelong care. They may never be able to live on their own, and even if they can, they often require ongoing medical care.
Even if disabled children have state-funded medical care and housing support, most families continue to provide for them financially. What happens if something happens to you? Who will care for your child? Life insurance often helps to fill this gap.
If you should die while a life insurance policy is in place, then the proceeds from the policy can go to pay any need, including the needs of your family and children. The funds can also be placed into a trust fund that would allow for a third party to manage the funds for the goals you have. For example, you may list your sister as the person managing a trust for your disabled child. The funds remain accessible, and within the confines of the trust, you can stipulate how the money is to be used.
If you’re a parent looking to have funds moved into a trust, you will need to monitor state laws. In some cases, the value of the trust may offset accessible funds from the government to pay for a disabled person’s care. You can work with your family’s estate planning attorney to avoid this concern. The goal should be to keep funds separate to ensure your child has ample care for their entire life. Work closely with your life insurance agent to discuss the risks present, as well as coverage that seems necessary to provide long term for your disabled child.
Of course, you want to be there to support your child and to be the one to meet their needs. Nevertheless, accidents can happen, leaving families in financial crises. With life insurance policies in place, you do not have to worry about this occurring. You gain some peace of mind knowing your loved one has ample care.
For more information on life insurance, contact one of our agents today. We can help you determine what coverage is right for you.