There are two basic types of life insurance plans: 

• “term” life insurance supplies insurance without any accumulation of cash value or capital
• other types, known as “whole life,” “universal life,” and “variable life” include a savings or investment element in addition to insurance. The latter varieties of insurance, sometimes referred to as “permanent insurance,” are essentially a joint package of investment and insurance.

Oftentimes, people whose children are without disabilities use their life insurance to try to assure that their children’s education will be paid for in the event that the parent or parents died before the children complete their educational career. When the children are fully-grown and out of school, the need for this insurance disappears. Term life insurance is an affordable way to handle such a risk. Parents of children with cerebral palsy, however, must realize that the financial risk of their deaths will likely not decrease as their child ages. Because the premiums of a term life insurance policy increase rapidly as you age, it might be wise for parents of children with disabilities to consider a savings or investment plan to eventually replace their term life insurance, or simply consider whole or universal life insurance instead.

After you review your choices of life insurance and have decided which form will work best for you and your family's needs, it is important that you coordinate your insurance plan with your long-term estate plan. In other words, you must decided on the beneficiary (the person who will receive the benefits of your life insurance in the event of your death). If you wish these benefits to go toward paying for your cerebral palsied child’s healthcare needs, you may want to designate a trustee who would, upon your death, inherit the life insurance benefits and use them in accordance with the guidelines established in your trust. If you designate your disabled child as the beneficiary, the inheritance may not only be subject to cost-of-care claims, but it also may interfere with government benefits eligibility, so a trust may be safer choice.

Estate planning for some people is one of those tasks that is easy to put off, it feels like something that you'll take care of in the "future." Yet as with many other aspects of life that are affected by having a disabled family member, if you are a parent of a child with cerebral palsy, it is important to pay close attention to your estate planning. We can not predict the future, but taking the steps to ensure that we have planned for the unexpected is can give you more peace of mind.

You don’t want your long-term financial plans (or lack thereof) to end up hurting your child when you are gone. Therefore, it is imperative that you make carefully laid plans. Be sure to name the people who will look after your child when you die and review your life insurance policy periodically to be sure that the coverage is adequate for dealing with your child’s needs. Most importantly, parents need to make detailed wills so that their wishes are carried out, and the devastating consequences of dying without a will are prevented. All those involved in your estate planning should be aware of what your will says and make sure that they are willing to take on any responsibilites that have been laid out in the trust and/or will.

If your child has cerebral palsy, having no will at the time of your death can be devastating to his or her future. In most states, if a married person dies without a will, the assets at the time of death first flow to the spouse and then to his or her children to be divided equaly. If a single parent dies, the entire estate is left to be split up equally among the children. In either case, if you die and you do not have a will, your child with cerebral palsy will receive assets in his name. As mentioned above, if your child has money in his name, it may interfere with government benefits eligibility as well as cost-of-care liability. In other words, your child will be left with not enough money to cover the cost of their healthcare, but too much to be eligible for government benefits. This would also be the case if you left any property to your child in her name, as the property would then add to the total value of their assets. Be sure to consult a qualified lawyer to draft a will that is suitable for your family. That way you can be sure that you don’t inadvertently make a mistake in your will that could put your child's future care in jeopardy.