If you are thinking about buying long-term care insurance or are still on the fence, you should consider beginning future planning for your child too. Doing some future planning can help you provide for your child and pay for your own long-term care.

What Is Long-Term Care Insurance?

Long-term care insurance is similar to health insurance, but it pays for different services. The insurance company will cover the cost of a nursing home, assisted living, or maybe in-home care, depending on the policy. If you paid for these services out of pocket, it would likely cost you hundreds of thousands of dollars.

Traditional long-term care insurance can cost a lot of money – several thousand dollars each year in premiums. Alternatives such as a whole-life insurance policy from which you can take out money for care are becoming popular, but they are often more expensive. If you have a child with special needs, you should consider purchasing long-term care insurance to protect yourself and your child.

What Does Long-Term Care Insurance Have to Do with Future Planning?

When you have a child with special needs, you often devote most of your financial resources to providing for your child. Some services are available through government programs, the school district (for those under age 22), or paid for by insurance, but the out-of-pocket costs add up. As a result, you are probably not saving as much money for your own retirement.

There is a federal exception to the five year look-back period for Medicaid purposes, which otherwise could prevent you from saving for yourself and paying for your child’s care. Money can be moved into a “sole benefit trust” for someone who is deemed disabled by Social Security. As a result, a parent or grandparent can become eligible immediately with no look-back period for Medicaid to pay for their skilled nursing care. An SNT can be drafted as a Sole Benefit Trust, though many do not have the proper additional provision.  

To learn more and get started, talk to a lawyer with experience doing special needs future planning.

Rubin Law is the only law firm in Illinois exclusively limited to providing compassionate special needs legal and future planning to guide our fellow Illinois families of children and adults with intellectual disabilities, developmental disabilities, or mental illness down the road to peace of mind. For more information, email us at email@rubinlaw.com or call 866-TO-RUBIN.