Which Life Insurance I should choose for a Child with Special Needs?


Children with special needs are those who have a disability or a combination of disabilities. They may be born with a syndrome, a cognitive or terminal illness, impairment, or any other serious psychiatric problem. These children require extra care and attention than usual. They have at least one person with them all the time to take care of their everyday needs. Since these children depend on their parents for a lifetime, the parents are worried about how the child will survive in their absence. Financial products like life insurance can prove quite helpful while creating a financial corpus for a child with special needs.

When you buy life insurance, you are assured of the fact that when the policyholder is no more, the insurance company will provide a sum assured to the nominee of the insurance. While there are several types of term insurance out there, here are some child insurance plans that are perfect for a child with special needs-

Disabled life insurance

Disabled life insurance is one insurance policy that you, as a parent, can opt for when you have a child with special needs. This policy is different from others as it allows a disabled person to be a nominee. The insurance company does not give a lump sum amount to the nominee. Instead, the nominee will receive regular payouts until he/she is alive. This regular payout ensures that they met the needs of your child until demise. Use a life insurance premium calculator to figure out if the regular payouts are enough for your child’s expenses or not.

Term insurance

When you are a parent of a child with special needs, term insurance is an ideal fit, as term insurances provide high coverage for comparatively lower premiums. It has the capability of providing protection immediately. Also, it is the perfect fit for you as a parent,because,in an unfortunate situation of your demise, term insurance can provide sufficient cover to your child. This helps in managing the child’s everyday expenses in your absence. Thus you can rest assured that all the needs of your child are taken care of with sufficient financial cover.

Joint life policy

A joint life policy is when you and your spouse have your life covered under one plan. In a case where one of you is no more in the world, the other one will receive the sum cover. As a parent of a child with special needs, you may have to incur several recurring expenses over and above the usual. Hence, it might feel costly to buy life insurance for two people. Instead, when you have a joint life policy, you comparatively pay lower premiums. Also, you are relieved that in the absence of one spouse, the other has enough financial standing for the expenses of a special child.

Whole life insurance

Whole life insurance is a permanent type of life insurance. This means that the insurance company covers the policyholder throughout life. When you are looking for insurance that will surely be there for your child in your absence, this is probably the one. When you are no more, your child will receive the sum assured of the policy. However, since it is a very simple insurance type with no saving or investment component, it is important to ensure that you have planned accordingly. Many people prefer to club a term plan or a ULIP along with a whole life policy to get the best of both worlds. When you put money in two policies, ensure that you use a life insurance premium calculator to know if you can pay the premiums of both with ease.

Government schemes of children with special needs

The Government of India has a scheme, NIRMAYA, for children with special needs. In this scheme, handicapped and mentally challenged individuals get a cover for medical treatment of up to Rs 1 lakh. As a parent, avail of this scheme as it will help you with the expenses of your child.

When you purchase life insurance for yourself as a parent or a child insurance plan, ensure that you have explored all the options available. After thorough research, choose the life insurance option that is well-aligned with your financial goals and whose cover will take care of the rising inflation.

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