Families with members that have special needs, whether those members are children, adults or seniors, build relationships and dependence on the caregivers. Simply put, in many cases, the caregivers become an extension of the family.
The discussion of other insurance policies, LTC or Long Term Care insurance, and financial vehicles, i.e. Trusts, is a separate conversation. This conversation is focused on the discussion of the impact (financially) upon the death of a primary caregiver.
People with special needs, disabilities, and disorders, very often have full-time or part-time paid caregivers.
It’s human nature to get caught up in life’s day-to-day, but for those that depend on a caregiver have you ever considered what happens if the caregiver suddenly passes away?
Before we dive into the conversation of caregiving and life insurance, let’s first take a look at one of the requirements for a life insurance contract (policy);
The person being insured must also consent. So, in the case of a caregiver, it’s best to discuss this beforehand with the caregiver since they WILL be contacted for their consent. You do not want to put your caregiver in an uncomfortable position.
Below are two screen captures from a case I recently worked where a “friend” was named as the beneficiary, names are blurred out. The first was a communication from the insurance carrier asking me to follow up with the person who purchased the policy to describe the insurable interest of the “friend”. The second screen capture was the response I submitted after further discussion with the client.
Here is where the lines may get a little blurred. With certainty, every case is different and some will be white, some black and some grey (blurry).
I can’t, we can’t, make that decision for you however we can provide some things to consider that may help you understand if you have an insurable interest in a caregiver.
If a caregiver passes, will you result in a financial loss;
In closing, the most important thing we would hope you take away from this article is that your hired caregiver has value to your family. The value is physical, emotional and financial. Consider for a moment what may happen to your family financially if you lose your caregiver, if you are subject to financial loss, you may wish to consider some form of life insurance on the caregiver, however, proceed with due diligence and knowledge!