photo credit: bluemodern

One of the hardest decisions to make when trying to purchase a life insurance policy is the amount of coverage you should have. You want to make sure that your family is well taken care of after you’re gone and not having to scrape by – because you didn’t choose a large enough life insurance policy in the first place. Having a plan in place that will allow them to vacation on the French Riviera every year isn’t necessary – though it is possible to have such a plan set up. You basically just want enough of a plan in place to keep them comfortable and not having to worry about their futures after you’re gone.

Hopefully, your estate will have far more investments in it besides a good life insurance policy. You need to have your other financial investments in place to make sure that the life insurance policy isn’t your family’s sole source of income from your estate. Of course, if you’re not married and have no family, your life insurance policy will be tailored completely differently. You may opt to have a smaller policy to take care of a relative or even a special pet – that part is entirely up to yourself.

Too Much or Not Enough?

If you over insure, you’ll probably be throwing money away on the unlikely chance of an early death. That is, unless you’re working in an industry where there are more workplace hazards than normal, such as a mining operation or working at a job in a volatile country. But if you under insure, you will always be worrying about whether it’ll be enough for your family once you’re gone.

Imagine yourself out of the financial picture of your family. If it doesn’t seem like your family will get by with the level of life insurance you chose, raise it until you’d be comfortable stepping out of the picture. The key is to balance what you can realistically afford to pay for now, to get the highest amount of coverage for later.

The last thing you want to have to think about when you’re deciding on your life insurance planning and who will benefit after you’re gone, is whether or not your children with special needs will be taken care of properly. Because of their special needs they will have specific financial needs, including medical treatments for possibly their entire adult lives. Children with special needs are still entitled to a good quality of life and the life insurance plan you choose to take care of them should reflect this as well.

You want to have a plan in place that will ensure that not only the financial aspects of their lives will be maintained, but also their physical and social ones as well. It’s very important that the life insurance plan – and benefits – you have in place, outlives your children. In this way, they will not be wanting for financial help throughout their entire adult lives.

Using Estate Planning and Trustees to Ensure Your Child’s Future

Through the use of special trustee plans and other legal methods, your life insurance plan can be set up so that your children with disabilities or other special needs can be well taken care of long after you’re gone. This is done in a variety of ways including talking matters over with a special needs planning group which you can contact through your local mental health departments, or directly with your life insurance broker. In this way you can begin to lay out a plan to ensure that your special needs children are going to be cared for when you are no longer around to do it. By having a trustee appointed to ensure that your last wishes are followed and with a sound financial plan in place, your children should be taken care of for as long as they need to be.

By working closely with your life insurance company, you can set up a special needs plan that will take into account all the aspects of the special care that your child may need in the coming years. Some things to keep in mind when setting up this type of plan can include:

• Proceeds from your insurance plan are generally not subject to probate fees and are usually available almost immediately after the parents’ death
• You need to make sure that the plan takes into account a full lifetime of support for your child including special medical needs that may arise
• The amount of financial benefits in your plan must outlive your child to ensure the quality of life is maintained for their entire adult life