Q

How do child riders on life insurance work?

A

A child rider is an optional add-on to your existing life insurance policy that pays out a small death benefit if one of your children dies.

When you purchase life insurance, you can add life insurance riders to your insurance policy that extend or change your coverage in some way.

Child riders can be added to your life insurance policy to provide a small death benefit if one of your children dies while your policy is in force.

No one wants to think about a child’s death. But with a little planning, if the unimaginable happens, you won’t have to worry about funeral costs on top of grieving.

Life insurance is income replacement, and since children aren’t bringing in income, they don’t generally need life insurance coverage. But adding a child rider means you receive a small death benefit if one of your children were to die, which can help cover funeral expenses.

If you don’t think you could afford a funeral for a child or time off from work to grieve, a child rider on your life insurance policy is an inexpensive way to get financial protection in the worst-case scenario.

Child riders also offer a way to protect a child’s insurability, as they can often be converted into whole life policies. We typically do not recommend buying a whole life insurance policy for a child, which is different than adding on a child rider. We’ll explore the differences below and compare the costs of child riders offered by companies Policygenius works with in 2020.

KEY TAKEAWAYS

  • We recommend parents add a child rider to their term life insurance policies to protect their families if a child dies unexpectedly

  • A child rider is different than buying life insurance for a child, which rarely makes sense

  • If funeral costs or taking time off work to grieve would put your family’s finances in danger, a child rider is a smart and inexpensive choice

Life insurance and children: Child policies vs. child riders

There are two options when it comes to life insurance coverage for children: a whole life insurance policy for your child or a child rider added to your own term life insurance policy.

Children’s life insurance policies

These are whole life policies which are a type of permanent life insurance that combines a life insurance policy and a savings vehicle.

Child life policies only make sense in rare circumstances. For example, if your child has a serious illness, it may make sense to purchase a children’s insurance policy for your child. Even then, it’s important to weigh the expensive premium costs with the death benefit payout insurance offers.

→ Read more about buying life insurance for children.

Child riders on your term life insurance policy

A child rider is also known as a child term rider or children’s term rider.

Child riders are low-cost additions to existing policies. A single child rider will usually cover all current and future children in your household for a small premium.

For most people, a child rider on your term life policy is a better option to protect your family and provide a small death benefit in case of the death of a child. Coverage and cost vary by insurer, but common coverage amounts are between $5,000 and $25,000, according to 2020 Policygenius data.

How life insurance child riders work

Most insurers allow adults between the ages of 18 and 65 to add child riders to their individual term policies, though some companies require adults to be older than 20 or younger than 55 at the time of application.

Your children do not have to undergo a medical exam for you to add a child rider, but some insurance companies do ask medical questions about any children you have. If your child has a pre-existing condition, you may be unable to add the rider. If you have multiple children, it’s possible some of them will be covered by a child rider and not others due to their medical profiles.

Additionally, some insurance companies don’t offer child riders in some states due to insurance regulations. Your agent can tell you what riders are available where you live.

Does a child rider cover multiple children?

Typically, a single child rider will cover all current and future children in your household, including birth children, adopted children and stepchildren. However, grandchildren are not applicable for coverage under a child rider. Children between the ages of 15 days to 18 years can be added at the time of application; once added, children are covered up to age 25, generally, though coverage age varies by insurance company.

You can add a child rider when you’re buying your policy, though some insurers will let you add a child rider after the policy is already in force. If you’ve already purchased a life insurance policy and you’re interested in adding a child rider, contact your life insurance company or agent to ask if adding one is possible.

Cost of child riders

Child riders are generally priced per $1,000 unit of coverage (how much money the death benefit would be if paid out). Five dollars per unit per year is a common price, but some insurers charge more and some charge less. The cost is added on to your yearly or monthly premium. So if, for example, you’d like $10,000 of coverage for a child rider, you would pay $50 a year in addition to your existing life insurance premiums.

Each insurance company has its own coverage amounts. For some insurers, that means a range (e.g. $1,000 to $25,000); for others, coverage is offered in two tiers (e.g. $5,000 or $10,000).

Child rider policy conversion

Most child riders can be converted into a permanent policy once the child ages out — sometimes at three-to-five times the amount of the original rider coverage. For example, if you have $10,000 in coverage on your child rider, you could convert it to a $30,000 whole life policy for your child.

However, permanent policies such as whole life insurance aren’t right for most people because they are much more expensive than term life policies. But if your child ends up having a medical issue that could make it hard for them to get life insurance in the future, converting a child rider to a whole life policy would be one way to protect their insurability.

Child riders and additional life insurance coverage

Some policies allow you to add an additional disability rider that serves as a waiver of premium if you’re on disability, but other rider protections do not apply to children, even if you have a child rider. For example, accelerated death benefits or long-term care benefits riders do not apply if your child is diagnosed with a terminal illness or critical illness, even with a child rider.

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Child riders by life insurance company

CompanyEligible age at time of applicationRider expiresConversionAmount availableAnnual cost per $1,000 unitAll children one riderAsks medical questions about children at time of applicationAdd after issue
AIG15 days up to but not including 19th birthdayChild: 25; Parent: 65No$500 to $25,000$5.00YesYesYes
Banner Life15 days to 25 yearsChild: 25; Parent: 65Yes$5,000 or $10,000$5.50YesNoNo
Lincoln Financial15 days to 18 yearsChild: 25; Parent: 65Yes$1,000 to $15,000$5.00YesYesYes
Mutual of Omaha15 days to 20 yearsChild: 23; Parent: 65Yes$1,000 to $10,000$7.20YesYesNo
Pacific Life15 days to 18 yearsChild: 25; Parent: 65Yes$1,000 to $10,000$5.50YesYesYes
Principal14 days to 18 yearsChild: 25; Parent: 65N/A$5,000 to $25,000$5.00YesNoNo
Protective15 days to 18 yearsChild: 25; Parent: 75N/A$1,000 to $25,000$6.00YesYesYes
Prudential15 days to 18 yearsChild: 25; Parent: 75N/A$10,000 to $100,000$5.15YesYesNo
SBLI15 days to 23 yearsChild: 25; Parent: 65N/A$1,000 to $25,000$6.00YesYesNo
Transamerica15 days to 18 yearsChild: 25N/A$1,000 to $99,000$6.00YesYesNo

* N/A = Information unavailable at this time. Speak to a licensed Policygenius agent for more details.

Methodology: Information based on policies offered by Policygenius as of 12/11/2020.

While we do not recommend separate life insurance policies for children, child riders are an inexpensive way for parents to get the most out of their life insurance policies. Adding a child rider to your policy means extra financial protection for your family in case something unexpected happens to one of your children. If the cost of a funeral or the cost of taking time off work would cause your family financial trouble, consider adding a child rider to your term life insurance coverage.

Child rider FAQs

What’s the difference between a child rider and child life insurance?

A child rider is an inexpensive, optional add-on to a parent’s life insurance policy that pays out a small benefit if a child dies while the policy is in force. Child life insurance is a permanent life insurance policy in the child’s name that’s expensive, but can be useful in unique circumstances. Child riders can help parents pay for unexpected funeral costs and can cover multiple children.

Can I add a child rider to my policy at any time?

It depends on your insurance company. Some companies allow you to add (or drop) a child rider after your policy is in force, but some do not allow changes once a policy is issued.

What does a child rider pay for?

Like a typical life insurance death benefit, a child rider death benefit is a tax-free lump sum of money that can be used for anything, including funeral expenses, or can enable parents to take time off from work while grieving.

Insurance Expert

Logan Sachon

Insurance Expert

Logan Sachon is the co-founder of The Billfold, a groundbreaking personal finance site for millennials that was named one of Time's 25 Best Blogs of 2012. Her work has been published in New York Magazine, Glamour, The Guardian, BuzzFeed and more.

Insurance Expert

Rebecca Shoenthal

Insurance Expert

Rebecca Shoenthal is an insurance editor at Policygenius in New York City. Previously, she worked as a nonfiction book editor. She has a B.A. in Media and Journalism from the University of North Carolina at Chapel Hill.

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