If you are a parent to a differently abled child, you would need to not only support him mentally, physically but also financially for your special child for rest of his life. Our exclusive post will talk about how you could help your child and provide him with comforts and assistance when you are not around –
What Does Differently Abled Mean?
Some of the terminology used for a differently abled child is –
Impairment any loss or abnormality of structure or function, psychological, physiological or anatomical. (This is at the level of the organ)
Disability is any restriction or lack (resulting from an impairment) of ability to perform an activity in the manner or within the range considered normal for a human being. (This it is at the functional level where range of activities may be affected).
Handicap is a disadvantage for a given individual resulting from an impairment or disability that limits or prevents the fulfillment of a role that is normal for that individual. (This focuses on social disadvantages because of un-fulfillment of the role.) Thus, impairment may result in disability and that, in turn, may lead to handicap.
Why Do You Need To Plan Your Financials For Your Differently Abled Child?
The special child may not ask for luxuries but because of his special health needs, you may have to spend a bit more on his “special education” or to buy equipment like a wheelchair to make him independent or even some emergency trips to hospital, could dig a deep hole in your pocket. You need to plan because of your monthly income you have to save for your retirement and also for your kid unless he is earning by himself. For all of these, the best option is to plan ahead.
How to Plan Your Financials For Your Differently Abled Child?
Before working out on your financials gather this information as these are the factors that decide on financial planning.
- The Nature of Disability – permanent, partial, curable,
- Your Child’s life expectancy
- Monthly Expense
- Current Income
- Future Income [ estimated]
- Assets You own
Get Insurance for Yourself
Your child is totally dependent on you, and being a special child he needs to have access to money more, so make sure to get insurance for yourself.
Get Insurance for Your Child on your name
Unfortunately a normal insurance policy does not cover the kid with special needs, currently, only LIC offers two insurance policies –LIC Jeevan Adhar for a special child, where in the case of parent death the child gets 20 % of sum assured and rest as monthly income for rest of his life. One could also buy Endowment policies like Jeevan Vishwas from LIC that provides an annuity for the child. The only disadvantage with these policies is that being the traditional policies the premium pay-out is on higher side. Also, the annuity offered is not inflation adjusted. But if you combine these with a term insurance, they could really be beneficial in meeting the monthly expenses and as a contingency plan.
LIC Jeevan Adhar Plan
The below illustration is for a healthy Male opting for a Sum Assured = Rs 1,00,000 and Premium Paying Term = 25 years respectively.
Age of handicapped dependent = 1 year
Image Credit – MyinsuranceClub
LIC Jeevan Vishwas Plan
The below illustration is for a healthy Male opting for a Sum Assured = Rs 1,00,000 and Policy Term = 25years respectively.
Image Credit – MyInsuranceClub
The Niramaya Health Insurance Scheme by Govt. of India is another scheme that covers people with mental disabilities for a Rs. 1 Lakh cover at a very nominal premium. The cover includes various OPD treatments as well treatment for pre-existing diseases from Day 1.
Build a Corpus
A child with special need might have emergencies or special health care needs. It is wise to build a corpus, as part of contingency plan.
Create a TRUST to take care of the needs of the child upon loss of dependence from parents. It is important to have trustees that are close family members who will work in the interest of the child, should any untoward event must happen.
Whom should I appoint as a Trustee?
A trustee could be anyone trustworthy and reliable someone from your family or close friends or you can take help of some NGOs or The National Trust. Appoint at least two trustees if not more.
Thanks to the government, which provide a tax rebate for taking care of a special child. Plan your investments in such a way to take benefit of Section 80 L and rebate under Section 88. Being a parent of special child one could also claim a tax deduction under Section 80 DD of up to 40000 /- for medical treatment, rehabilitation and training of your child. Under this section, the even investment made in insurance policies are also covered. However you would need to ask a government doctor to provide you with a certificate of disability, proof of expenses and investments.
Make a Will
To ensure your child is in safe hands and has all income, investment returns and asset you saved for him, make a will.
Get Legal Guardianship
As per law, once the child is 18 years old, he is an adult, capable of taking his decisions. Hence to continue managing his financial decisions you would need to apply for legal guardianship of your child.
We hope we have answered your queries on how easily you can plan for your special child. If you still have any unanswered questions or need help, feel free to contact us here.
We would be glad to help you with your planning and investment related decisions.
– Samiksha Seth
Content Strategist – Dilzer Consultants Pvt Ltd.