Special Needs

Planning for the future of a special needs child takes special preparation. Two necessary documents that should be put in place are a Supplemental Needs Trust (Special Needs Trust) and a life insurance policy to fund the trust.

When a disabled/special needs individual is a member of the family, a life insurance policy can help to preserve the future financial security for that individual. A life insurance policy owned by a Supplemental Needs Trust is an option that can ensure future funds for the benefit of the special needs individual without risking their government benefits. The specifics of the life insurance product and amount of the policy is determined by the current and future financial needs of all family members, including the needs of the special needs dependent.

Please see our most recent article on Special Needs planning

Glossary/Basic Definitions/Links

Trust: a fiduciary relationship in which one person (the trustee) holds the title to property (the trust estate or trust property) for the benefit of another (the beneficiary).

Supplemental Needs Trust (Special Needs Trust): a trust established to provide supplemental funds to a disabled person in a manner that does not jeopardize his or her access to the governmental rehabilitation or support programs by holding the title to property for the benefit of a child or adult who has a disability. The trust can provide benefits to an individual but not cause the individual who has the disability to be disqualified from government programs. (Many special needs trusts are funded, at least in part, with some type of life insurance.)

Life Insurance

Term Life Insurance: offers protection that insures an individual for a specified period of time-anywhere between one and 30 years. A term policy pays a benefit if that individual dies during the period covered by the policy. If the premium is not paid, the insurance stops. These policies do not build any cash value.

Permanent Individual Life Insurance: Including Whole Life, Universal Life, and Variable Life, can provide protection for your entire lifetime, or in certain instances, up to a specific age, at which point the insurer pays the policy owner the cash value. Permanent life insurance policies can build cash value or be designed to deliver a death benefit to age 125.

Survivorship Life Insurance: is a joint term or permanent insurance policy taken out on the lives of two individuals that provide a death benefit on the event of the second death. This is typically the type of insurance policy that funds a special needs trust. Since the policy premium pays one death benefit, the premium can be substantially less than separate stand-alone policies.


mass.gov/dmr –Department of Developmental Services

doe.mass.edu –Department of Education

thearc.org –Association for Retarded Citizens

fcsn.org –Federation for Children with Special Needs

tillinc.org –Towards Independent Living and Learning

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