Why Caregivers Should Have Term Life Insurance

When you’re responsible for supporting someone else, make sure a safety net is supporting you.

Parenting is a full-time job, and if you have children with disabilities, the mental, physical and financial duties can pose a unique challenge. Securing a term life insurance policy or a combination of term and permanent life insurance (like whole life insurance) for yourself now can help ensure that, should something happen to you, there will be continuity of care for your child, and his or her needs will be well met in the future.

How Much Is a Caregiver’s Role Worth?

An annual Mother’s Day survey on Salary.com identified 34 roles that mothers perform for their children, ranging from dietician to nurse to laundry manager.¹ The conclusion: If a person were hired to do the same tasks as a parent, the hypothetical median salary in 2018 would be $162,581, an increase of nearly $5,000 from the year before. Parents of children with disabilities tend to assume additional responsibilities, so the value of their work would likely be even higher.

Moreover, that amount only covers what it would cost to pay someone to fill in for a parent’s role – not the expenses a child may incur. For a child born in 2015 to middle-income, married parents, child-rearing expenses will add up to $233,610 from birth through age 17.² Those expenses potentially increase for children with disabilities, whether it’s paying for skilled care providers, special education or other needs. The U.S. National Library of Medicine reported that people affected by disabilities will spend around $10,000 annually – over $8,000 more than a person without disabilities – in out-of-pocket costs just for medical services.³

An annual Mother’s Day survey on Salary.com identified 34 roles that mothers perform for their children, ranging from dietician to nurse to laundry manager.

How Can Term Life Insurance Help?

According to the 2017 Amica Life Financial Peace of Mind Survey, welcoming a child is the most critical driver for consumers ages 25-34 to begin shopping for life insurance.⁴ Young parents understand life insurance is a vital tool that can be used to help provide for their children in the event of their passing.

Beneficiary considerations

Once you determine the policy that’s right for your situation, it’s preferable to choose a beneficiary other than your child with special needs, because an insurance payout in the child’s name could be counted toward his or her Supplemental and Security Income and Medicaid eligibility.⁵ Be sure to consult with a financial professional in your state who can assist you with the appropriate beneficiary designation for your specific situation.

Term policies can provide higher coverage amounts at a lower premium than other policies, so it may be a more affordable option as you balance other financial obligations. Term policies are flexible; you can choose the length of the term – from 10 to 30 years – that will best cover your needs while raising your child. Don’t forget to also consider whole life insurance to help ensure that you always have coverage for the ones you love. With either policy, pricing is often based on age, so the earlier you apply for a policy, the lower the rates will likely be.

• Moms: We Know You’re Worth It, Salary.com, 2018.
• Families Projected to Spend an Average of $233,610 Raising a Child Born in 2015, United States Department of Agriculture, 2016.
• Health Care Expenditures of Living With a Disability: Total Expenditures, Out-of-Pocket Expenses, and Burden, 1996 to 2004, U.S. National Library of Medicine, National Institutes of Health, 2009.
• 2017 Amica Life Financial Peace of Mind Survey, 2017.
• A Life Insurance Strategy for Families With Special-Needs Children, NerdWallet, 2016.

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