Life insurance consumer tips: Life insurance on caregivers, Pt. 1

By Steven Kobrin

Steven H. Kobrin, LUTCF


Editor's note: This article will help you explain to clients how life insurance provides a way to ensure the financial security of a special needs person after their caregiver passes.

At different times in our lives, we all become dependent to some degree on family and friends for basic needs. That is part of life.

In a caring society, members care for one another through all life's ups and downs.  And certain financial products can help facilitate this care. Life insurance is key among them.

The special needs child
Many children are faced with serious medical challenges due to illness or accident. They face daunting obstacles to becoming fully independent adults.

With proper care, however, these children are capable of tremendous accomplishments.

For example, our society today offers them the most advanced medical care and therapy available. Research organizations provide the newest data to professionals and patients alike. As a result, parents can utilize training and support systems specifically designed to assist their children in reaching their life goals.

Nonetheless, many special needs children never become fully self-supporting in terms of financial independence. They may achieve many valuable life goals and contribute richly to the fabric of society, but their contributions might be intangibles that do not contribute to financial independence.

In this case, their financial support system becomes of primary concern. What happens when their parents (or other caregivers) are no longer alive to look after their financial well-being?

Life insurance on the caregivers — in this case, the parents — can be a lifeline for these children, even into adulthood. The benefit can provide an essential extension of ongoing care and independence.

Some guidelines
Here are some guidelines to follow, if you are planning to purchase life insurance with the goal of caring for a special needs child.

(1) Consult with your legal and tax advisors so as to properly address the issues of beneficiary, policy ownership and other estate issues.

(2) Choose a broker who is knowledgeable about the impaired risk market. After all, caregivers themselves can have health issues, too.

(3) Be sure to get prequalified for coverage.  In this way, you can be sure you will get the best value for the premium dollar.