Why Parents of Special Needs Children Need Life Insurance in India

What is Life Insurance for Children with Special Needs?

Children can thrive best when their care and financial security are well-planned and organised. Life insurance for children with special needs ensures that, in the unfortunate event of a parent’s death, the child continues to receive financial assistance. Here, the parent is the life assured, and the child is the nominee, receiving the policy benefits.

Life insurance for special needs children helps secure long-term financial support through the death benefit. This payout can be used to cover their ongoing medical treatments, therapies, specialized education, and day-to-day living expenses. It ensures the child’s long-term care and routine are maintained even if the parent is no longer around to provide financial support.

 

Importance of Life Insurance for Families with Special Needs Children

Life insurance is essential for families with special needs children because it helps provide  financial assistance for the child in the event of the death of the parents.

 

1. Parent as Life Assured

Where the  parent is the life assured and the child is the nominee , the death benefit ensures that if the parent passes away, the payout can  fund medical care, special schooling, therapy, assistive devices, and daily expenses. Optional riders, such as critical illness rider, , accidental death benefit rider, permanent/partial disability benefit rider. Furthermore, add an extra layer of financial protection by ensuring the child’s needs continue to be financially supported even if the parent faces a serious illness, accident, or loss of income-earning ability. These riders help maintain continuity of care and prevent financial disruption during challenging times.

 

Types of Life Insurance Plans for Special Needs Children

As a parent of a special needs child, you can consider buying the following types of life insurance plans for your child’s security –

 

• Term insurance plan

  A term insurance plan is a basic policy that covers the risk of premature death. The plan provides a guaranteed^* benefit if the parent passes away during the policy tenure. Moreover, if you choose the whole-of-life coverage option, you can enjoy a wider scope of coverage.

  Term plans also offer a range of additional riders, both inbuilt and optional, that may help you extend the coverage beyond premature demise, on payment of additional nominal premium. Equip the plan with these riders and enjoy protection even in other emergencies like accidental disablements, critical illnesses and the like.

   

• Child insurance plan

  A child insurance plan is a specifically designed policy that is meant to secure a child’s financial future. Depending from Insurer to Insurer, the plan sometimes offers a premium waiver benefit that waives off the premium when the parent dies. You can also opt for this benefit as an add-on rider by paying additional nominal premium.

  Thus, some child insurance plans secure the child’s financial future by securing a corpus even after the parent’s demise.

   

• Savings-oriented plans

  A term plan and a child insurance plan are the instruments that can help you secure your child’s financial future. Besides these plans, you may also opt for savings-oriented plans to create a corpus for your financial goals and your child’s needs. You can choose endowment or money-back plans if you want guaranteed* returns. On the other hand, if you are looking for market-linked returns, unit-linked insurance plans (ULIPs), will be a suitable choice.

   

• Whole Life Insurance

  Whole life insurance for special needs children provides financial security for the child by offering life cover on the life assured parent’s life. Since the coverage extends up to 100 years of age, it provides greater financial protection. Some term plans offer whole life coverage, which allows the insured to lock in lower premiums at a younger age.

 

Things to know when buying insurance

While a life insurance policy can help you plan for your child’s secured financial future, there are some points that you should keep in mind when buying the policy. These are as follows –

• Choose an assured for creating a suitable corpus that will be sufficient to meet your child’s needs.
• Opt for a long-term coverage duration for longer protection and corpus creation.
• You may customise the coverage with riders so that you can get additional protection, on payment of a nominal extra premium.
• The premium that you pay for the policy can earn you tax benefits under Section 80C of the Income Tax Act 1961, up to Rs. 1.5 lakh and subject to other provisions stated therein.

 

Key Takeaways

• Life insurance for special needs children can secure their financial future, covering medical care, therapy, education, and daily living expenses in case of the parents’ death.
• Parents can choose from term plans, child insurance plans, savings-oriented plans, or whole life insurance, many of which offer optional riders, premium waivers, and returns of premiums for added protection.
• When purchasing a policy, select a suitable sum assured, opt for long-term coverage, and consider additional riders. Premiums may also qualify for tax benefits under Section 80C (only under the old tax regime), allowing you to combine security with financial efficiency. 

 

Conclusion

While you shower your child with love and care for their safety, don’t forget to secure their future, financially. A life insurance policy can help you do just that. Consider buying a policy so that in your absence, your child does not have to worry about meeting their lifestyle or medical expenses. The financial assistance the plan provides may help them become financially independent.

 

Frequently Asked Questions

 

Does autism affect life insurance eligibility?

 

It does not automatically cause disqualification. Eligibility and premium for children with Autism Spectrum Disorder (ASD) will depend on the medical reports, severity of the diagnosis, the degree of impact on daily functioning, and any co-existing medical conditions.

 

How does ADHD impact eligibility for life insurance?

ADHD can influence life insurance eligibility and premiums. Insurers consider the medical reports, severity of the condition, treatment adherence and health. While a diagnosis may increase premiums, it doesn’t necessarily result in coverage denial.