In 2015, Massachusetts Mutual Life Insurance Company (MassMutual) and Easter Seals collaborated on Easter Seals Many Faces of Caregiving Study1, a study of caregivers2 in America. Financial impact topped the list of caregiver concerns, and the study found that 91% of caregivers are unpaid. That’s not an unusual statistic when you consider most caregivers are family members. But when family finances are a major concern, supplementing income or creating a good financial strategy to better manage finances, help cover lost earnings, or help pay medical and care costs are important options to consider.
They seem to be attempting to manage chaos on a daily basis,” says Isleen P. Gimenez Wilson, Director of SpecialCare at HighPointe Financial Group3 in Overland Park, Kansas, a general agency of Massachusetts Mutual Life Insurance Company (MassMutual). She is also a parent of three children with special needs. “One day it’s finding proper treatment. The next, it’s about optimizing educational outcomes for their child. Or it’s about therapy, health insurance, bullies at school, or getting bills paid. Usually it’s more than one issue going on at a time, and often the caregiver feels issues can’t be resolved fast enough, and the vision he or she has for their loved one is rapidly slipping away.”
Managing finances is one way to get a bit of control over the chaos. “I know my clients are doing the best they can,” says Gimenez Wilson. “What I try to do is help them stop feeling like they’re spinning their wheels and help them slow down enough to hear what options are actually available.”
Disability Income Insurance
One option is Disability Insurance (DI) which can be purchased directly from an insurance company. When the insured person becomes ill or injured and can’t work, the policy would replace a portion of lost income due to a qualifying illness or injury.
“For parents who are caring for a child with special needs, this insurance protection is one they should seriously consider,” explains Gimenez Wilson. In some cases, one parent may work while the other stays home and provides care for the child. They’re already a one-income household. If the working parent should become unable to work, how will the family fare? Or if both parents work, how will the family finances be affected if one income ends?
DI policies can provide short-term or longterm benefits, provides a limited income, and has coverage limits, so it’s best to talk with a professional who can fully explain the policies available and help you determine which is best for you. That person can also review DI policies you may have through your employer.
“Some clients haven’t considered the consequences of a spouse becoming unable to work. They say they’ll figure it out if and when that occurs,” says Gimenez Wilson. “But it’s not easy to get a job in short order or to find one that will pay what’s needed to support the family. If I don’t try to help them understand the importance and value of DI, I’m doing them a disservice.”
DI can’t be purchased after a person becomes ill or injured, of course. So what then? If you haven’t planned ahead, how can you supplement income after a working family member can no longer work?
Social Security Disability Insurance
Individuals who meet the Social Security Administration’s strict definition of “disability,” may qualify for Social Security Disability Insurance (SSDI). As with DI coverage, SSDI will not fully replace a person’s earnings.
At the beginning of 2015, the average SSDI payment was $1,165 per month ($13,980 annually).4 That’s barely above the 2015 federal poverty level of $11,770 for an individual.5 Obviously, it may not pay all of a person’s living expenses, but it can certainly help.
The application process can be complicated and time consuming, and if denied, the appeal can be even more arduous. Once approved, any income you may earn (for instance, from a part-time job) will be limited. Exceed the limit by even a dollar, and you’ll lose SSDI benefits.
“We like to be sure our clients have considered SSDI and any other government benefits they may qualify to receive,” says Gimenez Wilson. “We ask if they’ve applied, been denied, or appealed. We ask if they’re aware there are specialists in many communities – either within government agencies or as private advocates – who can help them navigate the system and qualify for benefits.”
Some people who qualify for SSDI may need to rely on it for their lifetime. Others may not want to be reliant on SSDI any longer than necessary. Either way, it’s important to understand how it can help.
Adult children with special needs who have never worked may qualify for SSDI based on a parent’s/spouse’s employment earnings. Find out which social security benefits and services you might qualify for by completing the benefit finder questionnaire at www.benefits.gov. And for information about SSDI benefits and to apply, contact your local Social Security Administration office.
Manage Your Financial Impact
“When it comes to understanding financial options and creating a good financial strategy, our clients often don’t know what they don’t know, so they can’t ask the questions they need to ask.” explains Gimenez Wilson. “Working with a Special Care Planner6, who’s received training and is skilled in serving people with special needs is like going to a cardiac professional instead of a general practitioner when you have a heart condition. We take time to get to know you and your dreams for yourself and your family. We help you understand your options. And we leverage the expertise of other specialists, such as attorneys with special needs experience.”
If you feel like you’re spending more time managing chaos than managing finances, talk to a Special Care Planner.
No one professional can provide everything a family needs. An integrated team comprised of, an attorney, a CPA, and others, such as social workers and caregivers, and a Special Care Planner or other financial professional who specializes in working with special needs, all working together is the best way to serve the client. We recommend you choose to work with professionals who are qualified, experienced, and involved in the area of special needs.
1 To download the results of this study, visit www.easterseals.com/explore-resources/for-caregivers/caregiving-study-2015.html
2 Impulse Research conducted an online study in January 2015 with a random sample of 1,043 men and women ages 25 to 49 who cared for a parent, child, grandparent, spouse, friend, sibling, or aunt/uncle. The overall sample error rate for this survey is +/-3% at the 95% level of confidence.
4 www.ssa.gov/disabilityfacts/facts.html (Social Security Administration)
5 https://aspe.hhs.gov/2015-poverty-guidelines (U.S. Department of Health and Human Services)
6 A Special Care Planner, a title used by MassMutual financial professionals, is someone who has received advanced training and information in estate and tax planning concepts, special needs trusts, government programs, and the emotional dynamics of working with people with disabilities and other special needs and their families. The certificate program was offered by The American College in Bryn Mawr, PA, exclusively for MassMutual financial professionals. Additionally, a designation of Chartered Special Needs Consultant (ChSNC), which evolved from the certificate program, is now offered through the American College for financial professionals. MassMutual financial professionals who have completed the certificate program, or received the ChSNC designation, can use the Special Care Planner title.
The SpecialCareSM program, developed by MassMutual, is an innovative outreach initiative that provides access to information, specialists, and financial products and services that can help improve the quality of life for people with disabilities and other special needs and their families and caregivers.
* The Special Care Planner, a title used by MassMutual financial professionals, who have received advanced training and information in estate and tax planning concepts, special needs trusts, government programs, and the emotional dynamics of working with people with disabilities and other special needs and their families. The certificate program was offered by The American College in Bryn Mawr, PA, exclusively for MassMutual financial professionals. Additionally, a designation of Chartered Special Needs Consultant (ChSNC), which evolved from the certificate program, is now offered through the American College for financial professionals. MassMutual financial professionals who have completed the certificate program, or received the ChSNC designation can use the Special Care Planner title.
A Special Care Planner through MassMutual’s SpecialCareSM program can assist parents in drafting Letters of Intent and can help make a difference in the quality of life for an individual with special needs, their caregiver and other family members. Through SpecialCare you will learn valuable financial strategies, identify financial strategy solutions, access vital information, and meet certified specialists who will work with you and your professional advisors – your banker, accountant or financial planner, lawyer, social workers and health care providers – to review your financial picture and offer options to fit the needs of each situation. For more details, visit MassMutual’s website at http://www.MassMutual.com/specialcare, or call 1-(800)-272-2216.
Founded in 1851, MassMutual is a leading mutual “http://www.massmutual.com” life insurance company that is run for the benefit of its members and participating policyholders. The company has a long history of “http://www.massmutual.com/aboutmassmutual/financialinfo/strength” financial strength and strong performance, and although dividends are not guaranteed, MassMutual has paid dividends to eligible participating policyholders consistently since the 1860s. With “http://www.massmutual.com/productssolutions/individualsfamilies/producttype/lifeinsurance/wholelife” whole life insurance as its foundation, MassMutual provides products to help meet the financial needs of clients, such as “http://www.massmutual.com/productssolutions/individualsfamilies/producttype/lifeinsurance” life insurance, “http://www.massmutual.com/productssolutions/individualsfamilies/producttype/disabilityincome” disability income insurance, “http://www. massmutual.com/productssolutions/individualsfamilies/producttype/longtermcare” long term care insurance, “http://www.massmutual.com/retire/plansponsors” retirement/401(k) plan services, and “http://www.massmutual.com/productssolutions/individualsfamilies/producttype/annuities” annuities. In addition, the company’s strong and growing network of financial professionals helps clients make good financial decisions for the long-term. MassMutual Financial Group is a marketing name for Massachusetts Mutual Life Insurance Company (MassMutual) and its affiliated companies and sales representatives. MassMutual is headquartered in Springfield, Massachusetts and its major affiliates include: Babson Capital Management LLC; Baring Asset Management Limited; Cornerstone Real Estate Advisers LLC; The First Mercantile Trust Company; MassMutual International LLC; MML Investors Services, LLC, Member “http://www.finra.org/” FINRA and “http://www.sipc.org/” SIPC; OppenheimerFunds, Inc.; and The MassMutual Trust Company, FSB.
The information provided is not written or intended as specific tax or legal advice. MassMutual, its employees and representatives are not authorized to give tax or legal advice. Individuals are encouraged to seek advice from their own tax or legal counsel. Individuals involved in the estate planning process should work with an estate planning team, including their own personal legal or tax counsel.