What is a child rider on life insurance?
A child rider, also known as a child insurance rider or child term rider, adds coverage for one or more dependent children to a parent’s life insurance policy. If an insured child passes away while the rider is active, the policy pays a death benefit to the policyholder.
Adding a child term rider onto your life insurance policy can be an inexpensive solution that insures dependents without having to purchase a separate life insurance policy for each child. If you're a parent with one or more children, there are a few reasons why you may consider child life insurance.
How does a term child rider work?
A child term rider is added to the parent's life insurance policy, often at the time of purchase. Though coverage is separate from your main policy, you’ll pay the rider cost alongside your monthly or yearly premium. Typically, no underwriting is required to qualify for child rider life insurance. The death benefit payout is a lump sum that is usually not taxable.
Depending on the carrier, coverage is available for children 15 days of age to 18-25 years of age and will cover the child until they reach the “age of maturity,” which is often age 25. Some policies will allow you to convert some or all of the child term rider policy into a permanent policy when the child reaches the specified age of maturity, regardless of their health.
What are the benefits of adding a child rider?
A child term rider can help protect dependents and help you prepare finances for a second child. Here are several benefits of child rider life insurance:
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The death benefit can help cover hospital bills, funeral costs and more.
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One flat fee rider covers one or more current or future children, including adopted children and stepchildren.
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The rider protects children regardless of their health status.
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The rider can be converted to a permanent policy.
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The rider remains active even if the child gets married.
What are the drawbacks of a child rider?
While adding life insurance for children to your policy can prove beneficial in many ways, there are some drawbacks:
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If you're able to convert the policy at the age of maturity but don't, the coverage will expire.
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If you're able to convert the policy at the time the child rider expires, the child will begin to pay premiums at their attained age.
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The amount you can convert into a permanent* life insurance policy can be limited to the amount set by the life insurance company.
Learn more about life insurance for children as well as additional life insurance policy riders.
* As long as required premium payments are timely made.
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