Life insurance for your child | Autism PDD
No, its not for if the child dies! Its an investment method AND its a safe way to insure that they DO have life insurance later as an adult.
We got variable adjustable (similar to whole life) life insurance (not term life insurance!) as a tax-free way of saving for their future (if you withdraw money from a mutual fund or IRA, you have to pay tax). Your adult child can "borrow" against their life insurance tax free for a down payment on condo, emergency money, etc. This is the only investment vehicle out there that lets you do that.
For now, the policy is not in their names so they do not "own" it - we do, so no trouble with getting public funds should DH and me get hit by a meteorite tomorrow. We also have a trust set up (ever heard of special needs trust?) that will be the holder of all our money, should we get killed, and that means Cole would not have to miss out on any public funding for a special needs kid or adult.
Special needs trusts can be expensive to set up if you choose the kind that you start funding now, while we parents are alive. There's another type that we like that is set up to go into effect upon our death. Basically, you want your special needs kid to be a pauper in his childhood, youth, and adulthood IF HE CANNOT LIVE AND THRIVE ON HIS OWN.
When your child (kid or adult) has more than 2000 to his name, he is no longer a candidate for waiver money or other support. If you have a 250,000 life insurance policy and you die ina car wreck tomorrow, your kid will have to spend 248,000 of it before he can get so much as a free ink pen from the government. Idiotic, yes. Painful to think about - yes.
But nobody expected Princess Diana to die at age 36 either. You need to do this stuff.
As some of you know I lost my oldest son 10 years ago,he was 16,his funeral costs were 8,000 dollars,he died in another province so the costs were higher,even so No Insurance, My family Quickly got the word out ,and most sympathy cards held Cash,even though a year later being hounded by the Funeral home ,we had to take out a loan to pay it off.
My oldest son has a policy held by us,but ds was refused, they said we could reapply at 6 ,We will.
Linda
In other words, to answer the original question if life insurance was for if your child died or if it was to guaranteee future life insurance - it is both.
Sorry to disagree with a previous poster but obviously life insurance IS partly for if your child dies. Funeral homes may be nice for very young children, but maybe not for bigger children. And when you are in the middle of horrible grief - you do not want to worry about how you are going to pay for the funeral...
Same here. I still have a policy my parents took out on me when I was 6. It is whole life and I can also take out money against it if I wish for certain things...I should add that often if a child dies, a lot of funeral homes don't charge as much for services and caskets. I know when we had our stillbirth, we were told that if we wanted a funeral that the charges would be minimal (like a few hundred dollars). We were told at the time that for the death of a baby or child that most funeral homes make adjustments. It is so rare to have a child die that a lot of places have a fund that they just kick in so as to not have so much of a burden be placed on the family. Maybe that was only true where we used to live, but I would like to think it is true of a lot more places...It is called borrowing, but it is borrowing from yourself! You are just supposed to replace the money later on.
If you needed 15K to help towards a downpayment on a house, you can withdraw it tax free from your own mutual-fund-invested-life-insurance-policy, and if you get clobbered in the mean time by a cement truck, then your survivors get the investment money, the life insurance pay off, but minus the 15K you paid down on the loan. If you do not get clobbered by the truck and live to enjoy your new house, then you incrementally pay back the 15K into your own account.
Anyway, we have a brilliant financial planner in the family and for our situation and our portfolio, this is an excellent vehicle. Not for everybody, but one should consider all options.
Most people are really good at what they do, and most are not very good at financial planning. Somebody earlier said to go to a pro, and that's my opinion too! Happy hunting! Over and out...
I understand -- I am old-fashioned about borrowing from myself! Afraid I would "forget" to pay it back, ever.
Wish I had a brilliant one in my family! I hate risk ...
Insurance isn't just one ball of wax. TERM life insurance is for if your child dies, Snoopywoman is right. That is the only thing it does, and it is dirt cheap to get for most people.
If all one is worried about is being able to pay, heaven forbid, for a funeral, then term policies are what people use. But as the first thread pointed out, term policies can be revoked if a medical diagnosis or age comes into play. They are only good for a certain TERM of your life, ie, where you're young and "healthy".
WHOLE life or VARIABLE ADJUSTABLE life policies are primarily investment strategies that incorporate tax savings (with the secondary goal of life insurance). I know this sounds like splitting hairs, but people who are affluent enough to not bat an eyelash at couging up 15K in funeral costs buy WHOLE or VARIABLE ADJUSTABLE life insurance for their infants and kids on a regular basis. They also periodically increase the coverage/premiums - not because they think burial plot prices are going through the roof - but to bump up the investment.
The likelihood of a child dying is extraordinarily small, yet monied folks buy these policies like they would a 529 plan for college. The death claim is secondary. If ya'll are saying that term policies are NOT available to kids with an autistic diagnosis, then all that would be open to them would be whole or variable. And those have long term financial viability as their primary goal...which is a happier thing to think about anyway!
Hope this helps!
[QUOTE=LeAnne C]
Insurance isn't just one ball of wax. TERM life insurance is for if your child dies, Snoopywoman is right. That is the only thing it does, and it is dirt cheap to get for most people.
If all one is worried about is being able to pay, heaven forbid, for a funeral, then term policies are what people use. But as the first thread pointed out, term policies can be revoked if a medical diagnosis or age comes into play. They are only good for a certain TERM of your life, ie, where you're young and "healthy".
WHOLE life or VARIABLE ADJUSTABLE life policies are primarily investment strategies that incorporate tax savings (with the secondary goal of life insurance). I know this sounds like splitting hairs, but people who are affluent enough to not bat an eyelash at couging up 15K in funeral costs buy WHOLE or VARIABLE ADJUSTABLE life insurance for their infants and kids on a regular basis. They also periodically increase the coverage/premiums - not because they think burial plot prices are going through the roof - but to bump up the investment.
The likelihood of a child dying is extraordinarily small, yet monied folks buy these policies like they would a 529 plan for college. The death claim is secondary. If ya'll are saying that term policies are NOT available to kids with an autistic diagnosis, then all that would be open to them would be whole or variable. And those have long term financial viability as their primary goal...which is a happier thing to think about anyway!
Hope this helps!
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Also, remember as another posted with "whole life", or Variable, you may then be denied other benefits (ie, ssi, medicaid), which many of our children need. A lot to consider. I would consult a professional.
Yep! Ya need a pro to do any of this. When the kids "own" the policy, it is considered theirs. But while they are underage, the parents "own" it - they are the contributors and the beneficiaries.
You have to set up a trust with your will so they do not "own" it after your death. But then again, if you yourself have insurance or more than 2000 in possessions, you better set up a trust so that they don't own that money either!
As if autism itself wasn't enough to manage! Aaack.
PS. You can even have a life insurance policy on your ex-spouse or business partner, but if you are the one paying the premium and you are the beneficiary, then YOU own it.
My brother used to sell life insurance.
We have discussed this a lot and he and I both believe, there are far better returns to be gotten for your investment, than life insurance. Like CDs' ... mutual funds ... bonds (guaranteed returns).
So -- WHY life insurance, per se?
If you get term, it is super cheap and if the unthinkable does happen you are not going into debt. We pay a month for each child.Okay, I can see term ... but whole-life?
Foxl - its the tax advantage. If you withdraw from the mutual fund or cash out the CD, you have to pay those taxes. You can "borrow" against the insurance tax free. If you get the variable adjusted policy, that money goes into mutual funds which pay a better return than whole life.EW -- that gets complicated ... I am old-fashioned about "borrowing," too ...
My husbands company offers life insurance with no question to all dependants. It isn't a lot, but worth looking at.If you do get life insurance for your kids, just make sure it doesn't disqualify them from things such as waiver programs.
[QUOTE=WIMomOf2]If you do get life insurance for your kids, just make sure it doesn't disqualify them from things such as waiver programs.
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Yes, whole or variable policies that build cash value may disqualify your child from needed services.
I'm glad that I didn't get a policy for Andrew as we just qualified for the EDCD Medicaid waiver here in Virginia, thank goodness! But if your child has too much $$$ connected to their name/SS#, he/she will not qualify.
PS Never in a million years did I ever think that my financial circumstances would be where they are now for me at age 44! I worked as a full time doc for 12 years, then part-time for 3 years, now SAHM for two, but life brought so many unexpected events...You never know what tomorrow will bring, so Seize The Day!
Just wanted to comment - don't depend on you or your spouse's job for life insurance. Life happens. We thought my dh would be staying at his old job forever. Well, here we are in a new town and he has a different job. And, we have to fill out forms for insurability if we want to insure the kids which include questions about mental and neuroligical disorders. I don't want to have him disqualified so young, so we didn't apply for it. Very sad. But, he does have the other policy so we are good with that. Would have been nice to have the extra cushion, though... just in case.OK I hope I don't sound like a total idiot, but why exactly does one need life insurance for their child? Is this so that if the child dies
you have money for funeral costs? Or is this so that the child can have life insurance as an adult even if they develop health problems? Or both?Unfortunately, it is for if they die (GF). You may have seen Kedans Mom's post from yesterday about not having a headstone yet. Funeral costs, hope we never need them, for basic would be at LEAST 10-15k.It can also be for their future. When my DH and I got married and started having kids, we rolled the policies our parents took out on us as babies into larger policies that fit our current needs. I was posting on one of my threads and something occurred to me. For all of you who do not have an official diagnosis of anything (or at least not autism) - you should get a lot of life insurance for your child NOW. And the kind that is guaranteed - in other words they can't drop him for developing any kind of medical condition. We have ours through Gerber and I got tht highest amount I could - which he can then change over when he turns 21 and start paying on his own. They HAVE to let him - regardless of medical condition. I think we have that it can go up to 0,000. Which won't be a lot when he turns 21, but it is something.
Anyway, once you get a medical diagnosis - it is difficult to get life insurance. Which makes NO sense since autism doesn't have anything to do with how long you live... At least not from anything I've read!
So, if you haven't gotten the official word yet - get life insurance for your child NOW! I think there is some legislation in some states that is pending to try to stop insurance companies from excluding our kids from life insurance - but that is not the case in most states. Check yours now!
I made a couple phone calls to insurance companies following the deaths of Kaden Seagraves and Benjy Heil. Based on what happened to them with their insurance, I started to wonder if the policies I took out on my boys when they were babies were invalid. What I was told is that it's actually the MR diagnosis that can make a child uninsurable. It seemed like they assumed ASD = MR.
Our insurance carrier, Thrivant Financial, assured me that the our policies were valid and that they do insure children with a diagnosis of autism. However, if you are taking out a new policy, you have to wait until the child is around 5 or 6 and an assessment can be made. If the child is high functioning, no problem. If the child is moderately affected, your premiums may be higher. If the child is profoundly affected, they may not be insurable.
It seemed to me that a lot of the insurance companies were behind the times in their understanding of autism. I can't recall who I all called, but Thrivant was the only one who told me that they would offer insurance to a child with an ASD diagnosis. I have also heard through the grapevine to try calling Gerber.
Edited to Add: What have the rest of you found out?
You guys need to call your local Minnesota Life agency. They do not advertise like the sleazies at Met Life - they don't believe in it, and are a huge mega billion firm that's been around forever because of their principles. I love them, love them, love them. They are also coming up with a Special Needs trust department just for families like ours...it may be out now, haven't checked lately.
You can get "whole life" insurance which is like a savings account. Once you qualify, they cannot take it away. I think thats what Snoopywoman was talking about. You gotta dump more money into this kind of policy than "term" but the term stuff is only good until you reach a certain age or medical condition. Then all the money you've put it evaporates.
The other option is called "variable life"...which we have on both our boys and ourselves. The variable policy takes your money and puts it into a mutual fund of your selection. In general, a mutual fund pays more dividend than a savings account, but there's always a bit of risk. You have to put more bulky money into a variable just like the whole life...like maybe 100 or so a month, depending upon what you want them covered for.
With whole or variable life insurance, your kid can "borrow against" it when he or she is say, 25 and buying their first condo or townhouse. Because this is insurance money (NOT taxable), they can pull out all the interest it has earned plus more, but not have to pay taxes on it. They just "owe" themselves the money. If your child dies before they pay themselves back, their survivors/spouse/kids just get that portion less of insurance. No biggie.
I love variable life from Minnesota Life! Very reputable company that acts as an Advocate for my child's well being.
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