When a child is born with a special need, they will have a lifetime of care ahead of them. Typically, they will receive government aid, which will assist in paying for their future care and education. As such, they are limited in the amount of assets they can own or the income they can have and still qualify for aid.
In addition, an expensive lifetime of need arises. This need is too expensive for parents to shoulder for the lifetime of the special needs child. Although most of the need will be paid for by the government, they will have other needs throughout their lifetime and potentially after the parents are deceased. There is a need to create a special needs trust to have sufficient funds available for future care, especially after parents are gone. The special needs trust will be set up to allocate money for the special needs child’s care without serving to disqualify the special needs child from government aid due to too much in assets or income.
How does a family provide for a special needs child?
Life insurance on mom, dad, and both sets of grandparents can help meet that need. With a life insurance policy, the death benefit can be allocated to the special needs trust to fund the child’s care for years to come after a grandparent or parent passes away. The biggest worry of a special needs child’s parents is what will happen to their child if they are not there to take care of the child. With life insurance as a funding vehicle for the special needs trust, the parents and grandparents can rest knowing they have the situation taken care of and the child will be cared for after they are gone.
Which policy is the best?
Typically, a Guaranteed Universal Life (GUL) policy is utilized. This policy often provides the most cost effective permanent policy that will serve the purpose of funding the special needs trust. Grandparents need permanent coverage in that they are older when purchasing the policy. Parents are also attracted to the GUL policy due to the low cost for permanent protection. Make sure the GUL policy also comes with Accelerated Benefit Riders in the event of a qualifying illness or accident that significantly reduces life expectancy.