How Can Life Insurance Protect Disabled Child?

Special needs children can present exceptional challenges for parents. One being, ensuring your child is financially secure and looked after you have left. As any parent knows it can be both rewarding and challenging to raise a family. Nevertheless, caring for a child with such needs requires a devotional degree and commitment that can be overwhelming at times. Parents may feel frustrated and alone as they seek information, understanding and the help they desperately need.

Life insurance is one of the most stunning financial instruments available to you and your family. By far, life insurance is the best way to turn pennies into dollars when your loved ones are most in need of it. If you buy a term life policy or a full life policy, getting life insurance that is in place when you die is the secret to providing your family with financial security.

How does a child with special needs use life insurance?

Once that life insurance is acquired, the next step is to create a Special Needs Trust. A form of trust is expressly designed to protect the needs of disabled or mentally ill beneficiaries at present and in the future. You can use this confidence as the vehicle in this “garage” (as it were) to park the death benefit of your policy (the whole payout or just a portion), and your child will be financially covered after you’re gone.

Would a Will not do the same thing that life insurance does?

Not exactly. When you give property or other properties (including cash) directly to your offspring in a conventional will, it may disqualify the child from seeking government assistance down the road. In the courts, a will can also be challenged which could potentially delay access to those funds for years. But a Special Needs Trust is designed specifically for a very precise purpose … to protect the rights of a child with special needs.

Furthermore, some forms of federal assistance programs (Supplemental Security Income, Medicaid, etc.) have income eligibility requirements that an individual must meet to qualify for benefits. Nevertheless, if the financial resources and savings of the claimant are too large, this could have a detrimental effect on the amount of assistance provided.

The trustee has access to the assets with a Special Needs Trust, and not the kid. So as long as the child has no direct access to the funds, government aid managers tend to adopt a more “hands-off” approach. In short, if you have a child with special needs, this form of faith can provide the financial security and stability that your child will probably require after you have left.

Getting a special-needs trust

Also known as a supplementary-needs trust, a special-needs trust is designed for people who need help handling their finances. You will leave specific instructions on how to use the money, and appoint a trustee to manage the funds. A co-trustee, such as an attorney or a bank, can help ensure that the money is used properly. A special needs trust can be the best of both worlds depending on your situation — giving your child access to the death benefit plus government aid.

How do I exercise my policy’s benefits?

Your life insurance policy’s death benefits shall be paid out after you die. A loved one or legal representative may file a death certificate claim with your life insurance provider.

Most providers discharge the payment within 60 days of filing a claim. The payment is released in fixed installments over a predetermined period of time or as a lump sum to the beneficiary of the policy, depending on what you choose when applying for the policy.

To know more about best LIC plans, you can visit our website https://www.jayantharde.com or contact our representative at +91 712 2282029 or meet us at 51, Gurukripa, Old Sneha Nagar, Wardha Road, Nagpur – 440015.