Down syndrome occurs in people of all races and economic levels. It is one of the most common genetic disorders in the United States. Therefore, we felt the need to provide parents with options when it comes to life insurance on children with Down syndrome.
In this post, we will go over why it is important to secure life insurance coverage on your little one, things to consider and mainly what options are available.
Please note that the information below pertains to children under the age of 18, diagnosed with Down syndrome. If you are looking for someone over 18, we have a special guide on securing life insurance with Down syndrome.
If you would like us to take a look at your personal situation and provide you with our advice, you can reach out to us or fill out the instant quote form. We specialize in finding the best life insurance options for families and their children.
The statistics on this disorder are frightening. There is an increase in diagnosed cases of Down syndrome. In an article by the National Down Syndrome Society
“According to the Centers for Disease Control and Prevention, approximately one in every 700 babies in the United States is born with Down syndrome… About 6,000 babies with Down syndrome are born in the United States each year.”
Even though the numbers are on the rise, it is optimistic that people with the disorder have a longer life expectancy. People are more aware of this disorder and are trying to come together as a society. There are many organizations that are trying to bring awareness and offer resources to families raising children with disability. This will be an appropriate time to give a shout out to Opportunity Village in Las Vegas. You guys rock! The Magical Forest has become an annual tradition for many families, including ours.
Why life insurance on children with Down syndrome is important
It is important to secure life insurance coverage on your children. There are many benefits and reasons as to why set up a policy for them. In this post, we will go over the 2 main advantages of having life insurance coverage.
Secure coverage for the future – you want your children to have the protection. Unfortunately, with Down syndrome, many further complications may arise. Having the coverage set in place now will give you and them a peace of mind in future. Many children with Down syndrome grow up, marry and some even some even have children of their own. You want to make sure that life insurance would be one less thing for them to worry about.
Final expenses – hope no parent will have to use the life insurance they purchased for his or her child. However, it is a valid reason and avoiding it, would not make it disappear. Even outside of the world of Down syndrome, death in children occurs. Having a backup plan will allow any parent to grieve and not worry how to pay for the funeral.
Available options for life insurance on children with Down syndrome
Many life insurance carriers will deny an application for a child with Down syndrome. The reason being is that there are many uncertainties. Unfortunately, there might be heart problems or other health complications due to the disorder. Life insurance companies don’t like the unpredictable and most likely will reject an application for a child diagnosed with Down syndrome. So, what other options as a parent do you have?
Apply through your work – many employers offer life insurance coverage for the entire family during the open enrollment. In many cases, all it takes is to check a box and your little one is covered. However, it will be a good idea to consult with your Human Resource Department and ask for a copy of the policy. That way you can review the insurance and make sure there are no unpleasant surprises down the line. There are pros and cons of this option.
- This might be the only option available for many families who were turned down elsewhere.
- It is an affordable option, as life insurance through work is typically at a group rate.
- Not every employer offers family life insurance.
- There might be medical questions or underwriting involved. This means that the life insurance company that is offering the coverage may deny the application.
- Depending on the company, it may be a temporary solution. Sometimes, when you leave an employer you might not be able to “take” your life insurance with you.
On the other hand, if you are able to keep the policy without employment, the premium would increase. Your rate will be more expensive because you will be switching from a group to an individual rate. This increase may be unaffordable for many, causing them to cancel the policy and bring them back to square one.
Use a child rider on your life insurance policy – this is the second option for getting life insurance on children with Down syndrome. Before we go over this option, we would like to clarify the term rider on a life insurance policy. A rider is basically an add-on option to a life insurance policy. It allows you to customize your policy based on your needs. There are few points to consider ensuring that you get the coverage you’re looking for.
- Very affordable option to cover all of the children, living in the household
For example, typically a child rider costs about $5-6 per year per $1000 in coverage. If you would like to add $10,000 in coverage, you are looking at $6×10 or $60 per year in total cost. This is the total cost, regardless of the number of children you have in your household
- Certain carriers underwrite the parents, but not the kids on the policy. This is why it is vital to work with an agent who can navigate through the world of insurance and find a company that is the best fit for your needs.
- Your child will have the option to convert the rider to an individual policy, regardless of his or her health. This means that they can have life insurance set in place for the rest of their lives.
- Underwriting done on the parents – yes, we realize we listed this as a pro, however, it can also be a negative. Unfortunately, parents may not qualify for insurance themselves. Another thing is that the premiums are based on your age, health, and lifestyle.
- A rider offers a relatively small coverage amount. The average rider is about 10-15 units or $10-$15,000. This may not be enough coverage to meet the family’s financial needs.
- The rider needs to be added at the time of the application. In other words, you can’t add it to an existing policy.
Things to consider when researching life insurance on children with Down syndrome
When securing life insurance for your child, you need to consider any other future needs he or she might have. For example, if he or she is eligible to receive Social Security Benefits. Some policies build cash value and this can cause a problem qualifying for benefits. We would advise you to check with an attorney to make sure you are in compliance with the requirements.
Another thing to consider is coverage on yourself! As parents, we tend to focus 110% on our children and forget about ourselves. Please don’t do that. You need to make sure that you have adequate coverage for yourself to ensure that your children are taken care of should something happen to you. This might be a good time to mention that you might want to look into setting up a Special Needs Trust. It will provide guidance and stability to your disabled children. It also will ensure that your child/children could get the care they need.
Hope you find this article of value to you. What we would like you to take from it is that trying to find life insurance coverage for a child with a pre-existing condition can be challenging, but not impossible. If you have any questions, please feel free to leave them in the comments section below or get in touch with us.