A Quick Guide to Buying Life Insurance for Parents of Children with Disabilities

Parents of children with disabilities or children with special needs will probably have their hands full most of the time, as they have to tend to their children’s special needs as well as their daily work. Children with disabilities are also particularly vulnerable to injuries and physical abuse, so it might be good to buy life insurance for them to provide good healthcare coverage. This guide will help to provide the most basic information you need to know before buying insurance for your children who need special care.

Why you might consider buying insurance for your children with disabilities

There are plenty of reasons why your children will benefit significantly from life insurance. Still, the main reason is that they will continuously receive financial support and support in general for a long time in the unfortunate event of your death. As your children may not earn incomes as others do, they must earn benefits from the life insurance plan long after your death.

The best type of life insurance plans for children with disabilities 

There are two main types of life insurance plans that you need to know about:

Term insurance plans

 This kind of insurance plan is only valid within a specific period. However, it usually costs 5 to 15 times less than the other kind, whole-life insurance, so it generally is the go-to choice for the public.

Whole-life insurance plans

True to its namesake, this kind of plan is effective until the end of the applicant’s life, so it generally costs much more than term insurance plans. That said, as your children with disabilities will most likely need long-term support well into adulthood, these plans might be the most beneficial ones. So long as you keep paying the premiums, your children will receive the payouts when you pass away.

Furthermore, insurance plans can also be classified based on how the payouts will be handled in the case of the death of the applicants.

Second-to-die joint life insurance plans

The beneficiary will only receive the money for this type of joint insurance plan after both policyholders have passed away. However, this kind of plan is considerably cheaper than the other, so it might be an excellent choice for families that cannot afford much.

First-to-die joint life insurance plans

This kind of insurance plan shares many similarities with the above. Still, there is one principal difference: the beneficiary will receive the payout when the first of the two policyholders die. There will be no further payout after the death of the second one. Therefore, these plans are usually more expensive than the former, and, as the beneficiary will not receive the payout after the last surviving parent dies, they are not the most suitable choice for children with disabilities.

A few things to keep in mind when buying insurance

Typically, a child does not produce income, so buying insurance for children is not beneficial most of the time. However, this is an entirely different case with children who require special care. Here are a few things to keep in mind:

Life insurance will take care of the funeral fee for your children

A funeral can be a very costly matter, and the fee could go up to $10,000. However, with a good life insurance plan, the funeral will be covered, allowing you plenty of time to grieve alongside your loved ones. 

Life insurance for your child will become greatly beneficial when your child has grown up

When a child with disabilities has grown up, it will become increasingly difficult for that child to apply for life insurance. For that reason, if your child is insured from an early age, they will gain access to a small amount of insurance payout.

Child riders: Another viable alternative

There is usually an option to add a child to your existing insurance plan as a child rider. This option entitles you to a payout if your child dies, helping you cover the costs. As this option comes with an existing life insurance plan, it is usually the most popular alternative to take. Furthermore, child riders can often be converted into a lifetime policy when you or your child reaches a certain age, whichever comes first.

Although children generally do not call for insurance, buying insurance for children with disabilities is an excellent way to ensure that they receive financial support until the end of their life. Adding a child rider option alongside your existing contracts will also help you to cover the financial costs in the unfortunate event of your children’s death. If you need more information about exceptional insurance cases, don’t hesitate to contact us and let us know what you need.