Many parents are concerned about how they can fund a supplemental needs trust, especially in these rough economic times. Parents are also concerned about how their other children will feel if they divide their estate assets unevenly, providing more for their siblings with disabilities. These siblings might have even more resentment if they end up being financially responsible after you are no longer able to supplement your special needs child’s benefits. Children with autism have a normal life span and could easily need financial assistance until they are well into their 80s! Additionally, they may need to pay for care that you are no longer able to provide, such as a care manager or help with cleaning and shopping.
Parents with a disabled child should consider buying life insurance to wholly or partially fund the special needs trust. There are several types of insurance to consider. Term life is the least expensive option, but the premiums increase each year as the insured (that’s you) gets older. Since these policies need to be renewed, at some point these policies are typically dropped due to the steep increases in premiums as you age or experience health issues. There are several types of permanent life insurance including whole and universal. The least expensive option is known as survivorship or second-to-die life insurance. This term policy is payable only upon the death of the second insured, when it is most needed. It is best to consult a life insurance agent with expertise in this area.
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