Life insurance is an important way to financially safeguard your child if something happens to you. However, you may also want to consider how your policy protects you if something happens to your child.
Adding a life insurance child rider to your policy can help ensure you’re covered, no matter what the future brings. Should the unthinkable happen, this optional benefit can help you focus on grieving—not your potential expenses.
What Is a Child Rider?
A child rider is an optional add-on to your life insurance policy that covers your child’s life. If your child passes away, you receive a death benefit to help cover funeral expenses and other costs. The death benefit amount is typically modest, often ranging from $5,000 to $25,000.
In most cases, a single rider covers all your eligible children—including future additions to your family—without an increase in your premium. It usually remains in effect until your child reaches a certain age—typically 18 or 25, depending on the policy terms.
Some insurers require you to add a child rider when you purchase your life insurance policy. But if you don’t already have children, you can often add this protection later.
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Who’s Eligible for a Child Rider?
Typically, any of your children (biological, legally adopted, and stepchildren) who meet the insurer’s age limits are eligible for a life insurance child rider.
The age range varies by insurance company but often includes children 15 days to 18 years old. While your child generally isn’t required to take a medical exam, some insurers may ask basic questions about their health history.
In some cases, the company may not offer a child rider if the minor has a pre-existing medical condition. Additionally, the primary policyholder must meet the insurance company’s guidelines for the policy itself, including health and age requirements.
What Happens When a Child Rider Expires?
When your child reaches the maximum age your insurer stipulates, their coverage expires. However, many companies allow you to convert their coverage to a permanent life insurance policy once they age out of the rider. You can often covert it without your child needing a medical exam, preventing a future illness from hindering their ability to obtain coverage.
While this convertibility feature may sound attractive, these policies aren’t always less expensive than purchasing a new life insurance policy when your child becomes an adult. Additionally, some insurers limit the amount of coverage you can convert.
What Are the Pros and Cons of Child Riders?
A child rider can be a beneficial addition to your life insurance policy in some cases, but it can also have potential drawbacks you may want to consider.
Pros
Low Cost
Child riders protect your child often for as little as a few extra dollars a month.
Guaranteed Insurability
If your child develops a health condition later in life, the rider ensures they still have some insurance in place.
Flexibility
Child riders typically cover all the children in your family, including those born or adopted after the policy is issued.
Cons
Limited Coverage
For many families, the modest benefit from a child rider is enough to cover final arrangements. However, it may not provide enough cash for extensive medical bills or other potential expenses.
Older Parents Can Lose Coverage
Some insurers terminate the rider once the policyholder reaches a certain age—often 65.
Convertibility Can Be Expensive
While converting your child’s term coverage to a permanent policy can make sense if they have health issues, it’s not the cheapest route for most healthy young adults.
What Are the Alternatives to a Child Rider?
Adding a child rider to your life insurance policy can be a fairly low-cost way to safeguard your family in the event of your child’s passing. However, this optional feature isn’t the only way to provide protection and obtain financial security if something should happen to them.
The primary alternative is purchasing a life insurance policy in your child’s name. Obtaining insurance when your child is a minor allows you to lock in a set premium for the policy’s duration, even as they get older and potentially experience health issues. A permanent policy also allows your child to build wealth they can use later to pay for major expenses like a college education.
However, separate life insurance policies are typically more expensive than child riders. Whereas the latter might typically cost $4 to $5 per month for every $10,000 in death benefits, a whole life policy can cost roughly 10 times that amount, depending on the provider.
Is a Child Rider Right for You?
Adding a child rider to your life insurance policy can make it easier to cover final arrangements if something should happen to your child during the coverage period. If you could benefit from customized insights based on your situation and needs, reach out to an experienced financial professional. They can help you decide whether this optional feature is right for you and your family.
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