Employer-sponsored life insurance can be essential, especially for younger families. In many cases, companies will provide small policies that pay a death benefit equal to a year or two of salary. Employees usually have the option to purchase additional insurance, often at a discount, through their employer’s benefit program. The same concerns regarding retirement account beneficiaries apply when naming beneficiaries of life insurance policies. Life insurance may be a great option for funding a special needs trust, because it provides a relatively low-cost way to provide a much larger benefit to beneficiaries, including persons with special needs. In some cases, employees who have children with special needs may consider naming a special needs trust as the primary beneficiary of their company life insurance policy, and will often purchase additional insurance to guarantee that funds will be available for their child with special needs if the employee were to pass away. If you are just starting to save for retirement, have an old IRA that you never paid any attention to, or have employer-sponsored or personal life insurance policies that have not been reviewed recently, your estate planning team of professionals can make sure that your retirement plan(s) and life insurance do not interfere with the benefits (or potential benefits) of your child or other loved one with special needs.
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