What Is a Child Rider?
Quality Verified
Updated: December 14, 2023
Quality Verified
Updated: December 14, 2023
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A child rider, also known as a child insurance rider, is an add-on feature to your life insurance policy. It provides specific financial benefits such as a death benefit or terminal illness benefit to the beneficiary in the event of a covered incident involving their biological children, grandchildren, stepchildren, or legally adopted children. Children from two weeks to 25 years old may be covered by this rider, depending on the insurer's terms.
- A child rider is an optional add-on to your life insurance as their parent/guardian.
- A child rider provides a death benefit if the insured child passes away and may provide terminal illness benefits if the child is diagnosed with a terminal illness.
- Child riders insure children as young as 14 days old and typically last until they are between 18 and 25.
- Child riders can be converted to permanent or whole life insurance policies without undergoing medical underwriting.
- Child riders are generally more affordable than standalone child insurance policies.
How Do Child Riders Work?
Child Riders provide a small amount of life insurance coverage for a child. They are often cost-effective and convenient, as they eliminate the need for separate policies, which are more expensive. When adding a child term rider to your life insurance policy, a flat fee covers current and future children, including stepchildren and legally adopted children. Some life insurance companies restrict adding a child term rider to new policies only, meaning it's not an option to add later. A child rider’s coverage usually lasts until the child reaches a certain age, anywhere from 18 to 25, depending on your insurer’s terms.
Additionally, if your child marries before reaching the age of maturity, they may no longer be covered under the child term rider. It's important to discuss potential conversion to a permanent life insurance policy with your insurer and child before any such life changes, as the conversion is subject to the insurer's terms and conditions.
Why Add a Child Rider?
The uncomfortable reality is that the loss of a child can bring not only emotional distress but also financial strain. With the median funeral cost, including burial or cremation, ranging between $6,000 and $8,000, a child rider can alleviate the financial burden associated with such unforeseen circumstances. Though it's a scenario no parent wants to contemplate, having a child term rider in place ensures that during such a difficult time, the family is not burdened by the additional stress of funeral expenses.
Features of Child Riders
Child riders in life insurance policies can provide various benefits depending on your needs:
What Happens When a Child Rider Expires?
Most children cease to be eligible for child rider coverage between the ages of 18 and 25. You have several options when coverage expires, including converting to a permanent life insurance policy.
Adding a Child Rider to Your Policy
Insurers permit the addition of a child rider during or after the purchase of the parent's or guardian's policy. This adds to the policy’s premium, varying by the chosen coverage. Follow these steps to add a child rider to your existing life insurance policy:
Review Policy Options
Explore the available child riders offered by your insurance company and assess which ones align with your family's needs. It's advisable to understand each rider's specific benefits, such as death benefits, terminal illness benefits, or the option for conversion to a permanent policy.
Determine Your Eligibility
Children are eligible for a child rider from as young as 14 days old until 18 years old, depending on the insurance provider. The parent's eligibility may also be affected by their age and health, with many insurers requiring the parent to be within a specific age range, commonly between 20 and 55, at the time of policy purchase.
Contact Your Insurance Provider
Initiate the process by calling or submitting a request online. Your insurance company will guide you through the necessary steps and provide the required forms and documentation.
Submit a Request
Complete all necessary forms and provide any documentation and information your insurance company requires.
Answer Underwriting Health Questions
Health questions may be asked, which can affect the insurability of one or more children added to the policy.
Confirm the Policy Update
Ensure you receive a confirmation and review the updated policy to understand the coverage details and verify the inclusion of the child rider.
Cost of Adding a Child Rider
Adding a child rider to an existing policy incurs additional costs. Here are different cost implications that you may come across depending on your insurer:
1. Cost per Coverage: Some insurers offer child riders that cost between $5 and $7 per $1,000 of coverage. For example, a rider providing $15,000 worth of coverage could cost $75 a year or about $6 a month, whereas a $25,000 policy rider might cost $175 a year or roughly $15 a month.
2. Annual Costs: Some insurers offer fixed annual costs for child riders. For instance, $5,000 in coverage could cost $28 a year, while $10,000 in coverage might be $55 a year.
3. Coverage for Multiple Children: Child riders typically cover multiple children in one family under a single charge. For example, a $20,000 rider might cost around $100 or roughly $8 per month, but it covers every child in the family for the same price.
Child Rider vs. Child Life Insurance
Child riders and child life insurance differ mainly in coverage duration, amount and cost. Child riders offer limited-age coverage with one premium for all children, while child life insurance provides lifetime coverage with separate policies and the potential for cash value accumulation.
Child Rider FAQ
The following frequently asked questions shed light on child riders, a popular add-on that extends life insurance coverage to the young members of your family:
Benefits from child riders are generally not taxable as they are not considered income.
Yes, you can remove a child rider from your policy anytime. But if you still have children eligible for coverage under the rider, it may be worth discussing with your life insurance agent first. A child rider offers the option to convert to a separate life insurance policy for each covered child, usually without requiring new medical underwriting.
A child insurance rider is an affordable way to invest in your family’s well-being. One of its benefits is that it covers multiple children, including future kids, with one flat fee.
No, they provide coverage until the child reaches a specified age, often between 18 and 25. However, you can usually convert the child rider to a permanent life insurance policy, which will provide lifelong coverage as long as premiums are paid.
Related Content
Below are links to relevant pages on MoneyGeek pointing to different aspects of life insurance, premium terminologies, and considerations for insuring young members of your family:
Is Life Insurance Worth It? — Explore the intrinsic value and long-term benefits of life insurance, aiding you in comprehending the importance of having a financial cushion, which is also extended through child riders.
Should You Buy Life Insurance for Children? — Consider the potential benefits of securing life insurance for children, including providing a financial cushion for unexpected events and future planning, ensuring affordable, comprehensive protection for their needs.
What Is Covered by Life Insurance Policy? — This guide looks into various aspects of life insurance policies, helping you understand how they can protect and benefit your family, including coverage options for children.
About Nathan Paulus
sources
- Lighthouse Brokerage Financial Group. "Child Rider Details." Accessed November 29, 2023.