Child Disability Insurance - What is it? How does it work?
What is child disability insurance?
As much as we hate to think about it, as a parent or soon-to-be parent, you may one day find yourself in the position of caring for a severely ill or disabled child. Very often this can stretch parents—mentally, physically, and financially—to the limit. In the toughest cases, careers are derailed, finances depleted, and marriages broken. That’s not surprising given the costs involved. In fact, non-medical costs to families (including lost income of parents), for a child under 18 with a rare disease, are estimated to be $46,000 per year. Even in cases where basic care is manageable, providing your child with the resources necessary to thrive and reach their full potential may be out of reach.
The purpose of child disability insurance is to step into this gap and provide cash benefits to support the family and child on whatever is most needed: perhaps replacing income for a parent who takes time off, paying for skilled help, funding specialized therapy or training – or anything else the family chooses.
How child disability insurance works
Child disability insurance is not health insurance for your child. Where health insurance pays direct medical costs, child insurance helps with everything else. This is important, because for children with a disability or rare disease, more than half of costs are non-medical, for things like care help and lost earnings.
Child disability insurance from Juno is an employer group policy. The employer pays the full premium and all children of eligible employees are covered, with newborns automatically covered from birth.
Juno child disability insurance pays benefits for immediate critical events, such as a hospital stay that lasts longer than a week. The main part of the benefit, however, is monthly payments to parents to help care for a severely ill or disabled child over a longer period of time. Payments are based on severity and range from $1,250 to $6,250 per month, with a maximum payment of $500,000 over a child’s lifetime.
The monthly payments may last a few months or many years. The family of a child who is born 10 weeks premature and spends months in the NICU, for instance, is paid $5,000 per month while their baby is in the hospital. Other times, payments can stretch into many months or years. In another example, the family of a child fighting leukemia for 18 months before the cancer goes into remission would be paid $5,000 per month for a total payment of $90,000.
And sometimes the benefit period is much longer. For example, a child born with the rare disease Rhizomelic Chondrodysplasia Punctata (RCDP) will typically have severe intellectual disability, seizures, and skeletal abnormalities—and require round the clock care for life. The child’s family would initially be paid $5,000 per month, likely rising later to $6,250 per month, until the total payments have reached the $500,000 maximum.
As with other insurance policies, there are limitations. For example, children who already have a disability are eligible to receive only benefits related to new events or conditions. And cases that are more manageable because symptoms are mild to moderate are unlikely to qualify for long-term benefits.
No one knows if their child will be healthy or will be dealt a severe disease or long-term disability. When it happens, many families are surprised to learn that except for very poor families, there is almost no financial support provided by either federal or state governments, and often health insurance does not cover all therapies and early interventions that could help their child. The resulting strain on finances, emotions, relationships, and careers has until now been almost entirely shouldered by families.
Child disability insurance changes that formula by offering financial aid if a child has severe health problems. This way, families are supported not only in their day-to-day lives but also have the chance to invest in early-intervention so that their child can live as full and rich a life as possible.
Juno is the first company to bring child disability insurance to the United States. Juno provides up to $500,000 per child in addition to support services to families of children with a severe disease or disability.