Life Insurance Can Hurt Your Family
Dont let this happen to you!
From a traditional perspective, you may be working hard to provide for your family. Like most families, you believe in creating certain safeguards: savings, life insurance, etc. However, its these exact safeguards that can hurt an unsuspecting special needs family.
For most of us, we have dreams that we hold about the future for our family. Growing up, getting a job, eventually a career, and having kids, we find ourselves with dearly held dreams about everything from where we will live, to what kind of life we will provide those we love with, and to how we will safeguard them.
In the context of a special needs family, these long-held dreams transform and give way to different visions. However, sometimes, our old expectations do not evolve with us. For example, having life insurance is seen by most as a good idea. For a special needs family however, life insurance can present a major and dangerous challenge.
Social Security Benefits
From a social security perspective, our children may be considered disabled. Lets take a person with Down Syndrome, for example. He or she is deemed as having a presumptive disability and will be entitled to certain benefits, simply because of who they happen to be. Someone who is autistic, conversely, may have a greater burden of proof that they are disabled to receive such benefits. Having a guide to help you and your family secure these benefits is invaluable.
Any good guide worth their salt will tell you that under social security, your family will be living in two important phases of life: (1) the world before age 18, and (2) the world after. When your child is under the age of 18, social security will be concerned with how much resources (income / assets) YOU have available. After your child turns 18, social security is concerned with how much resources are held by your child. Eligibility is always determined (among a few factors) by resources: how much income and assets are available.
As a parent or guardian, there is some solace in knowing that our special needs family member can receive many benefits, including health insurance, simply because of who they happen to be. In the State of California, there is the additional benefit that we may be able to call upon our Regional Center case carrier and inquire about alternative housing options. A safety net is available as long as we follow the rules in the most basic sense, your child cannot have more than $2000 at any time.
Understand Life Insurance Dangers
As part of a special needs family, you must ask yourself, How will this action potentially impact the benefits enjoyed by my child? Where in a traditional sense life insurance is a great idea, its that same insurance that could potentially cut off your childs benefits in the future.
I recall my daughter calling me once and asking for my social security number. She wanted to do a great thing: she wanted to name my son as a beneficiary for her life insurance. Consider, however, what that would have done had he received any resources as a result of this in the future: he would have lost his benefits.
Could one of your family members already have named your child as a beneficiary? What potential danger could be lurking in the future as a result?
Have Difficult Conversations
To protect your child, you potentially must have many, many uncomfortable conversations with family members. Namely, you must ensure that family members are considering your childs benefits as they make personal decisions. Speak to grandma or grandpa about why they may want to reconsider naming your child directly as a beneficiary (there are ways for them to benefit your child with the right legal framework).
Its also up to you to have the emotionally difficult conversations about planning for those unknown tomorrows. Get an expert on your side who understands the particulars of the disability system and how your child can be best protected.
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