What Is a Life Insurance Child Rider?

Child Rider Examples

Let’s look at some examples to really understand what all that means.

Example 1

John Smith is 35-years-old and 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 just in case the worst should happen. SBLI would require John to fill out a questionnaire about his children before approving the rider coverage.

SBLI’s Child Rider Product Guidelines*:

The minimum age a parent can be to buy a child rider is 18 and the maximum is 65.
The minimum age a child can be to 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 each month).

If John added a $10,000 child rider to his policy, his two-year-old son would be insured for $10,000 and once his daughter is born and 15 days old, she would automatically be insured for $10,000. Once John’s son turns 25-years-old, his son will lose coverage (unless he converts) but his daughter will still be covered until her 25th birthday.

John can convert these riders to permanent policies for his children without having to prove their insurability, as long as he does so after their 18th and before their 25th birthdays. Typically parents will also transfer ownership of the policy to the child, but John has the option of continuing to own the policy if he wants to.

Example 2

Jim James is 40-years-old and 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 be to buy a child rider is 18 and the maximum is 55.
The minimum age a child can be to 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.

If Jim added a child rider to his policy, his 18-year-old son would be covered up until his 25th birthday but his one-year-old son would only be covered by the rider up until he is 21-years-old since Jim’s policy is a 20-year term policy.

Example 3

Jane Doe is 45-years-old and wants to buy a 20-year $500,000 term policy on herself from Banner Life. She also wants to add a child rider to her policy so her children are insured as well. She has three children: twin boys aged 15 and a daughter who is 22 years old.

The child rider would insure her twin boys, but because her daughter is older than 18-years-old she would not be insured under the child rider.

Banner does not require any information, health or otherwise, on children in order to become insured under a child rider.

Banner’s Child Rider Product Guidelines*:

The minimum age a parent can be to buy a child rider is 20 and the maximum is 55.
The minimum age a child can be to be insured is 15 days and the maximum is 17 years old.
Child rider coverage expires on child’s 25th birthday, or insured’s 65th birthday, whichever comes first.
The minimum face amount that can be purchased is $5,000 and the maximum is $10,000.
The rider can be converted to a permanent policy.
A $10,000 rider costs $55 annually.

If Jane added a $10,000 child rider to her policy, both her boys would be insured for $10,000 until their 25th birthdays, after which, Jane’s policy premiums would decrease $55 annually since the child rider would drop off if she had no other children to insure. The rider can be converted into permanent policies, as long as it is done before the rider’s conversion expiry date.