How do child riders on life insurance work?

When you purchase life insurance, you can add life insurance riders to your insurance policy that extend or change your coverage in some way. A child rider can be added to your life insurance policy to provide a small death benefit if one of your children dies while your policy is active.

Life insurance is meant to be an income replacement and since most children don’t earn money, they don’t need their own policy. But if you don’t think you could afford a funeral for your child or to take time off from work to grieve, child riders are an affordable way to have financial support in a worst-case scenario.

Life insurance and children: Child riders vs. child policies

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

Child riders on your term life insurance policy

A child rider is also known as a child term rider or child insurance rider. One child rider provides coverage to all of your children and any future children you have and is significantly less expensive than a child life insurance policy.

Adding a child rider to your term life policy is typically a better option to protect your family in case of the death of a child. You can add a $10,000 child rider to your term policy for as little as $4.17 per month, whereas a child life insurance policy might cost $100 per month or more.

Child life insurance policies

These individual whole life policies include life insurance coverage and an investment-like component called the cash value. They’re often advertised as a way to protect your child’s insurability and save for their future.

In reality, child life policies only make sense in rare circumstances due to their high premiums. Investing in a 529 plan usually nets bigger gains than a whole life policy. 

If your child has a serious illness that would make it difficult for them to qualify for insurance as an adult, a child insurance policy might make sense.

How do child term riders work?

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

You usually add a child rider when you’re buying your policy. Not every provider will let you add a child rider after your policy is already in force. Companies also have different restrictions around:

• Maximum death benefit for child riders

• Maximum age of the children covered

• Medical information required for the rider

• When the child rider expires

• Whether the rider is convertible into child life insurance

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 your children. If your child has a pre-existing condition, you may be unable to add the rider. If you have multiple children, some may be covered by a child rider and others won’t, due to their medical profiles.

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

How much does a child rider cost?

Child riders are generally priced around $5 per year per $1,000 of coverage. The cost is added to your yearly or monthly premium. So if you’d like a child rider with $10,000 of coverage, you would pay an additional $50 a year in premiums.

Does a child rider cover multiple children?

A single child rider covers all current and future children in your household, including birth children, adopted children, and stepchildren. However, grandchildren cannot receive coverage under a child rider. 

Ranges vary for each insurer, but coverage can usually be bought for children between 15 days and 18 years old. Riders generally last until your child reaches age 25 or you reach age 65 or age 75, depending on your provider. 

Do other insurance riders apply to child rider coverage?

When you purchase life insurance, you’ll have the option to add other riders in addition to a child rider. However, most other riders you purchase only apply to your coverage.

For example, accelerated death benefit or long-term care riders that allow you to spend part of your death benefit on end-of-life care do not apply if your child is diagnosed with a terminal illness or critical illness, even if you have a child rider.

One exception is the waiver of premium rider, which pays your premiums if you become disabled. That waiver covers all of your premiums, including riders. 

Child riders by life insurance company

Here’s how Policygenius’ partner insurance companies handle child riders on term life insurance policies.

What happens when a child term rider expires?

When your child rider is set to expire, you can either convert it into an individual child life insurance policy or let the coverage run out. Your child would then need to apply for their own coverage as an adult.

Most child riders can be converted into a permanent policy—sometimes at three to five times the amount of the original rider’s coverage. If you have $10,000 in coverage on your child rider, you might be able to convert it to a $30,000-50,000 whole life policy for your child.

However, permanent policies aren’t right for most people because they are five to 15 times more expensive than term life policies. Unless your child develops a medical issue that could make it hard for them to get life insurance in the future, they’ll find a cheaper policy on their own.

While we do not recommend buying separate life insurance policies for children, child riders are an inexpensive way to get the most out of your life insurance policy. 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.