How does life insurance fit into planning for a special-needs child?

For a child who will need lifelong support, life insurance on the parents is often a cornerstone of the plan because the need for money does not end when the child reaches adulthood. Many families choose permanent coverage (whole or guaranteed universal life) rather than term, since the obligation may outlast any term period. Critically, the death benefit should be paid to a properly drafted special-needs trust rather than directly to the child, so the funds do not disqualify them from means-tested benefits like Medicaid and SSI. A second-to-die policy on both parents can be cost-effective when the funds are only needed after both are gone. Coordinate the policy beneficiary with an attorney who drafts the trust so the two documents align.