Life Insurance as a Financial Solve for Special Needs Children

Raising a Family

Did you know life insurance could be an integral part of the financial plan to provide for your special needs child? Parenting a child with physical, mental or emotional disabilities requires a great deal of care and planning. Parents must consider questions such as; who will care for your child if both parents die, where will your child live and where will the money come from to provide for your child?

There may be financial help from local, state and federal programs that could supplement the costs needed to support your child. But will this be enough to provide full financial support for your child’s care?

You may want to consider setting up a special needs trust. The trust is an instrument that will allow you to properly plan for the event where both parents may predecease their child. You can elect a trustee to use funds in the trust to provide the care needed for your child. Often times, the trustee is a family member who is familiar with the child’s needs. Another feature of the special needs trust is it provides privacy for those who may want to make a financial gift to your child.

As a parent of a special needs child, you must be careful when leaving an inheritance for your child, as it may disqualify them from eligibility of public funds for housing, medical care and government programs. Although, assets in a properly drafted special needs trust might not disqualify the child’s eligibility of public funds.

Creating a special needs trust is only part of the plan to fund the trust with assets. Some families with significant assets may fund the trust with their retirement plans or other savings and investments. Although, you may not have the assets to fund the trust and may instead choose life insurance as the primary funding source.

Life insurance can be an excellent funding source for both a larger and smaller estate. A life insurance policy provides the certainty that the funds will be available for the trust upon the death of the parents. On the other hand, retirement plans, savings and investments may not be as reliable, due to life’s uncertainty requiring parents to access those sources for their living needs. The life insurance payable to the special needs trust allows parents to leave other assets to their other children while properly caring for their special needs child.

Parents of a special needs child should consult with an experienced attorney when considering establishing a special needs trust and think about using life insurance to fund the trust. Life insurance is not the only way to fund a special needs trust but it may be a viable option for you when planning for your special needs child.

About the author: Ken Buccico holds a LUTC designation and has been in the life insurance business for 39 years. His wealth of experience empowers clients to make best possible decision regarding a life insurance policy. To explore the best  life insurance option, contact Ken at 1-800-651-1953 or