Down Syndrome-Life Insurance Options

Written by Rob Pinner

Down Syndromelife-insurance

This blog post I am a little too familiar with. My first and only child Liam, who is 7 months old, has down syndrome. I know all too well the challenges we face when it comes to securing life insurance on our little ones. In this article, I will give you some hope that we can find life insurance coverage for our children.

What is down syndrome?

Down Syndrome is caused by an error in cell division. This is called Nondisjunction and the results are the child ends up with 3 copies of chromosome 21, typical children have a pair. Doctors are not sure what causes this nor whether it happens prior to or at conception.  Down syndrome can come with health issues also. Some of the more common health issues are:

  • Heart defects
  • Vision problems
  • Hearing loss. …
  • Infections. …
  • Hypothyroidism. …
  • Blood disorders. …
  • Hypotonia (poor muscle tone). …
  • Problems with the upper part of the spine

Unfortunately, these health issues will affect your eligibility for life insurance.

Reasons to have Life Insurance on your child

  • Just because our children have an extra chromosome, it doesn’t make them any different than a typical child when it comes to life insurance. In fact they probably need it more, in my opinion. Nobody ever wants to think about having to bury a child, but unfortunately it DOES happen. You would rather be prepared than have to start a GoFundMe campaign.  GoFundMe has become the new life insurance for the uninsured.
  • Children with down syndrome grow up to be productive adults in many cases. Some even get married and have kids. Securing them a policy when they are young will ensure that your baby is covered as he/she advances in life.

Can my child qualify?

More than likely our children will not qualify for a traditional life insurance policy. With medical breakthroughs, our children are living longer more fulfilled lives than they were just 20 years ago. With that said maybe one of these insurance carriers will be cutting edge and start to insure them one day.  We can only hope.

The good news is that traditional life policies are not your only option if you would like life insurance for your child. The best choices you will have to secure life insurance-

  • Buy a group policy through your employer if it offered. Most employers will offer life insurance coverage for your family without asking any medical questions. This is perfect for our situation. The amount that you will be able to buy will be limited and set by your employer. The only downside to this is that if you retire, quit, or get fired  you will lose the coverage, and so will your child.
  • Add a child rider to your existing life policy or buy a new life policy with a child rider.  Some insurance companies, not all, will allow you to add your child without asking any medical questions. Make sure you speak with an experienced agent who knows which companies are best to apply with. This rider also allows your to convert it to a permanent policy before the age of 22. The death benefits range from $5K-$50K.
  • A credit union is always a good place to check. They always have some type of member group life insurance policy that you can purchase for on your child, which also doesn’t ask any medical questions. These policies are usually affordable, but be weary because some do have an increasing premium. You will have to be a member, so you may have to open an account there. Don’t worry though, credit unions usually have the best rates anyways.
  • Your final option is you will have to wait till your child is 45 or above to qualify for a guaranteed issue whole life policy.  These are permanent policies and range from $5K-$25K in benefit coverage. I’m not going to say they are affordable, but by no means are they over priced. Let’s be honest, we don’t have many options.  The only downside to these types of policies are that they have a graded death benefit. A graded death benefit means that in the first 2 years, if the insured passes away of natural causes they only pay the premium back that was paid into the policy. If it’s an accident during the first 2 years they will pay the full death benefit. After 2 years they pay the full death benefit no matter the cause. It’s basically a waiting period.

Things to consider

Although it’s very important to secure life insurance on any child, we have to take steps to make sure you don’t mess up any benefits that your child may receive. You don’t want to have a cash value policy in your child’s name if they are receiving social security benefits. The easy fix to this is have you or another family member be the owner. Always consult with a professional before buying anything that could jeopardize your child’s benefits.

One last thing, as a parent it is very important that you have adequate life insurance on yourself as well. Your child is going to need you even after you have passed away. He/She will not be able to sustain themselves on SSI alone.  The best way to do this is to set up a special needs trust and fund it with life insurance. This will ensure that he doesn’t lose any benefits, and that there are resources they to take care of him/her long after you are gone.

What did I do for my child?

I know you were wondering if I was going to let you in on what I did for my boy. We did 2 out 3 of the choices from above. I have 3 life policies on myself, but with 3 different companies. We were able to add him to all 3. I was also able to buy a policy through are local credit union.  It’s not hard to do if you can find the right help. If we can help you with anything please don’t hesitate and give us a call.

 

 

 

 

 

Rob Pinner
Rob Pinner

I have been a licensed insurance agent for over 15 years.  If you have any questions or comments please don’t hesitate to give us a call.

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