Child Term Rider: How It Works, Pros & Cons

If you’re a parent buying a life insurance policy on yourself, look into adding on a child term rider. A life insurance child rider is inexpensive and covers the lives of all your minor, dependent children with a small amount of life insurance. It can help ease financial stress during a time of immense grief and loss.

In this guide, you’ll learn what a child rider is, how it works, and how it can benefit you and your child.

Table of Contents

• What Is a Child Rider?
• How Does a Child Rider Work
• Children’s Rider Pros and Cons
• Is a Child Rider Worth It?

Looking to buy a life insurance policy for your child? Learn the difference between a child’s whole life policy and a child term rider.

What Is a Child Term Rider on Life Insurance?

A child rider is an “add-on” you can purchase with your life insurance policy that covers the life of your minor children and can also be converted into a permanent policy later in life without the child needing to show evidence of insurability.

• One rider is all you need to cover all eligible children (unmarried children, stepchildren, or legally adopted children).
• Any children born after you buy the rider are also eligible for coverage under the same rider with no increase in premium.
• Coverage options under the rider vary from $1,000 to $100,000, depending on the insurer.
• Most insurers require that a child rider be added when you initially buy your policy, but some allow post-issue.
• Child rider coverage is temporary, lasting until the child reaches adulthood, unless the rider is converted into a permanent policy. This temporary nature is the reason it’s also called a child term rider.

Learn more about the differences between term and permanent life insurance. 

Who Can Buy a Child Rider?

Child term riders are typically designed for parents to add coverage for their children to their life insurance policy. Depending on the specific terms and conditions of the policy, some insurance companies may allow the following people to add child term riders:

• Grandparents
• Aunts
• Uncles
• Other legal guardians

In such cases, the adult family member or guardian would need to be the primary policyholder of the life insurance policy, and they would be responsible for paying the premiums associated with the child term rider.

How Does a Child Rider Work?

When you buy life insurance, most companies offer an optional child rider. If you add the rider, the low premium is added to your policy’s overall cost.

The child rider provides a specified amount of coverage (death benefit) for each child included in the rider. The rider typically provides coverage until the child reaches a specific age, such as 18 or 25, defined by the insurer.

If the worst should happen and the child passes away during the term, the policy owner files a claim and receives the death benefit.

The death benefit provided by the child rider can help cover expenses such as:

• Final expenses – Funerals can easily top $10,000 once everything is said and done. Can you cover costs if the unthinkable were to happen?
• Time off work – If a child dies, their parent needs time off work. No one knows how long the grieving period may take. Would you be able to get back to work on your own terms, or would you need to go back for financial reasons?
• Counseling – I don’t think there’s comparable grief to losing a child. Often, parents need counseling. Does your health insurance cover this? If not, would you be prepared to pay out of pocket?
• Memory – When a child dies, parents and loved ones sometimes want to create a memorial or charity to honor the child’s memory.

What Happens When Children Become Adults?

Child riders also provide the option to convert the coverage into a permanent life insurance policy for your child when they reach a certain age, without the need for further underwriting.

When you apply for life insurance as an adult, many things come into play as the application goes through underwriting, such as:

• Age
• Medical conditions
• Lifestyle habits (e.g., drug and alcohol use, tobacco use, driving record)
• Family history (e.g., hereditary medical conditions)

By purchasing a child rider on your child before all of these factors have a chance to impact their life, you can secure their future insurability.

Typically, the parent is the one responsible for converting the rider to a policy, but, in some cases, the child may be allowed to initiate the conversion process themselves once they reach the specified age or gain legal capacity.

Converting a child rider is typically only done if the child is otherwise uninsurable. The coverage amount available from a child rider conversion is limited and the premiums for the new permanent policy will be expensive compared to a new term life insurance policy.

How to Add a Child Rider to Your Policy

When applying for life insurance through Quotacy, your agent will inform you about the child rider option. You can add it during this step or any time during the buying process. Only a handful of insurance companies will let you add a child rider after the policy has been approved and issued.

If you choose to add the child rider onto your policy for your children, there is typically just one form you would need to complete for the underwriting process.

In addition to birth date, gender, height/weight, and the children’s doctor’s information, questions on the form can include:

• Have any children ever had a driver’s license suspended or revoked within the last five years or been cited for moving violations or DUIs?
• Have any children ever been diagnosed with, treated for, or had symptoms of asthma, diabetes, cancer or tumor, or any disorder of the heart or blood vessels, including heart murmur?
• Have any children consulted or been examined or treated at a hospital or other medical facility within the last five years?
• Within the last ten years, have any children used, except as legally prescribed by a physician, tranquilizers, barbiturates or other sedatives; marijuana, cocaine, hallucinogens or other mood-altering drugs; heroin, methadone or other narcotics; amphetamines or other stimulants; or any other illegal or controlled substances?
• Have any children received counseling or treatment regarding the use of alcohol or drugs, including attendance at meetings or membership in any self-help group or program such as Alcoholics Anonymous or Narcotics Anonymous within the last ten years?
• Are any children receiving special training because of physical or mental disability or inability to participate actively at work, in school, or perform everyday activities?

The aspects of a child rider that can vary from company to company include:

• The minimum and maximum issue age for the primary insured (the parent)
• The minimum and maximum age at which a child is insured
• The minimum and maximum face amount
• The underwriting required
• How much permanent coverage can the rider be converted to
• The cost of the child rider

How Much Does a Child Rider Cost?

The premiums for child term riders are typically quite affordable, as they are based on the lower risk associated with insuring children.

Child insurance rider coverage ranges from $1,000 to $100,000, but $10,000 is a commonly purchased amount. The chart below shows the annual cost of a $10,000 child rider at the various insurance companies Quotacy works with.

With this rider costing approximately only $5 a month, it’s something we recommend to all parents with young children.

A child rider is one of many policy rider options. Learn about other life insurance riders you can choose to add to your coverage.

Children’s Rider Pros and Cons

A child rider is a no-brainer if you have young children. However, we also love a good pros and cons list. Consider the points below if you’re still on the fence about adding a child rider to your life insurance policy..

Pros:

• Affordable coverage: Child riders offer a cost-effective way to provide life insurance coverage for your children, with a single rider covering all eligible children.
• Guaranteed insurability: Purchasing a child rider ensures that your children have some form of life insurance coverage, even if they develop health issues later in life that might make it difficult or expensive to obtain coverage.
• Financial protection: In the unfortunate event of a child’s death, the child rider can provide financial support to help cover funeral expenses, medical bills, and other costs associated with the loss.
• Peace of mind: Having a child rider in place can provide peace of mind knowing that you’ve taken steps to protect your children’s financial future.

Cons:

• Limited coverage amount: Child riders usually offer a relatively low coverage amount, which may not be sufficient for everyone’s needs.
• Additional cost: While child riders are generally affordable, they represent an added expense to your overall insurance premium.
• Age restrictions: Child riders typically cover children only up to a certain age (usually between 18-25), after which they need to secure their own insurance or convert the rider into a permanent policy, potentially at a higher cost.

Is a Child Rider Worth It?

Yes, we recommend adding a child rider to your policy if you have minor children dependent on you. The benefits outweigh the cost.

Let’s explore real-life examples of how children’s term insurance riders work.

Example 1

John Smith, 35 years old, wants to purchase a 30-year $500,000 term policy on himself from SBLI. He also wants to add a child rider to his policy so his two-year-old son and unborn daughter are insured in case the worst should happen. SBLI would require John to complete a questionnaire about his children before approving the rider coverage.

SBLI’s Child Rider Product Guidelines:

• The minimum age a parent can buy a child rider is 18, and the maximum is 65.
• The minimum age a child can be insured is 15 days, and they would be insured up to, but not including their 25th birthday.
• The minimum face amount that can be purchased is $10,000, and the maximum is $25,000.
• The rider can be converted to a permanent policy with a face amount up to the maximum of the rider: $25,000.
• A $10,000 rider costs $60 annually ($5 monthly).

John adds a $10,000 child rider to his 30-year term policy.

• His two-year-old son is insured for $10,000.
• Once his daughter is born and reaches 15 days old, she automatically receives $10,000 in coverage.
• When John’s son turns 25, he’ll lose coverage (unless he chooses to convert), but his daughter will remain covered until her 25th birthday.

John can convert these riders to permanent policies for his children without proving their insurability as long as he does so between their 18th and 25th birthdays. Typically, parents will transfer ownership of the policy to the child; however, John can continue owning the policy if he prefers.

Example 2

Jim James, 40 years old, wants to buy a 20-year $500,000 term policy on himself from Prudential. He also wants to add on a child rider. He has an 18-year-old son from a previous marriage and a one-year-old son from his current marriage. Prudential would require Jim to fill out a questionnaire about his children.

Prudential’s Child Rider Product Guidelines:

• The minimum age a parent can buy a child rider is 18, and the maximum is 55.
• The minimum age a child can be insured is 14 days, and they would be insured up to, but not including, their 25th birthday.
• The minimum face amount that can be purchased is $10,000, and the maximum is $100,000.
• The rider can be converted to a permanent policy up to 5 times the amount of the child rider.
• A $10,000 rider costs $51.50 annually.

Jim adds a $10,000 child rider to his 20-year term policy.

• His 18-year-old son is insured for $10,000 up until his 25th birthday.
• His one-year-old son is covered by the rider only until he is 21 years old, as Jim’s policy is a 20-year term policy.

Compare Quotes for Life Insurance with a Child Rider

Life insurance is an affordable way to financially protect those you love most. If you die unexpectedly, the death benefit provides your family money to cover expenses without creating additional worry and stress.

Adding a child rider to your policy can offer financial protection and peace of mind for your family in the unfortunate event of a child’s death and potentially guarantee future insurability for your children as they grow older.

If you want to add a child rider to your policy when you purchase, you can easily do so through Quotacy. Your agent can help ensure you get the proper forms and update you as your application progresses through the life insurance buying process. Start by getting a term life insurance quote today.

Note: Life insurance quotes and product guidelines used in this article are accurate as of May 26, 2023. These product offerings may change and the quotes are only estimates. Your life insurance costs may be higher or lower.