Children with special needs can benefit from life insurance

Apr 16, 2012

Financial planning protects children.

Linda Hunter Susman, a special care planner for a life insurance provider, told Fox Business that many families are turning to financial products, life insurance specifically, to help plan for their futures and the futures of their children. This is particularly apparent for families raising a child with special needs.

Because children with special needs have a unique set of expenses they will  need to pay throughout their lifetime, many parents struggle to find a product that can help prevent a financial hardship for their child if and when they pass away. The federal government said anyone who receives a gift or inheritance of more than $2,000 cannot receive government assistance, which many adults with special needs depend on. Thus many parents use life insurance products to build a special needs trust to help pass money along to children without disqualifying them for valuable government assistance such as Medicaid, Fox Business reported.

Parents who have children without special needs are also using life insurance to help ensure a stable financial future for their family.

In a blog piece for the Napa Valley Register, financial advisers and certified financial planners Tom and John Mills said life insurance coverage can become the most important financial product when a child is born. Many young families start with a term life insurance policy because it is affordable and provides death benefits, and then later might consider switching to a whole life insurance product, The Napa Valley Register reported.

Depending on the household size and income, the amount of life insurance coverage to help protect a new family varies. It is important for consumers to weigh all their options before purchasing a policy, Tom and John Mills wrote for the Register.

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