When considering life insurance, families often consider just buying life insurance to insure the life of income-earning individuals.
In some special needs families, where one spouse primarily earns an income and the other spouse serves as primary caretaker, the death of either spouse could create a heavy burden on the family. While the caretaker spouse is not primarily generating income, the caretaking services they perform have significant value compared to the cost of a professional caretaker or a care facility.
One solution to this problem is to purchase individual life insurance policies for both spouses. Families can then have the peace of mind of knowing they will be financially covered in case either spouse should pass away.
For added security, families can combine individual life insurance policies with what is called second-to-die life insurance. Second-to-die life insurance only pays out after both spouses pass away.
One factor to keep in mind with insurance and special needs families is making sure that the beneficiary provisions are properly structured to not endanger the special needs individual’s eligibility for government benefits. A special needs attorney can help create an appropriate special needs trust to receive any insurance payout and make sure that the beneficiary clauses of any insurance policies are directed straight to the trust.
Another consideration is the cost of insurance. There is a balance to be struck between present needs, long-term planning, and insurance against unexpected circumstances. Different types of insurance, term or permanent, have different costs and benefits that should be considered. A special needs attorney can help advise on an insurance plan that fits in a family’s budget.
To develop a plan that meets your special needs family’s specific situation, please call Martha C. Brown & Associates at (314) 962-0186.