What is a Child Rider?
A child rider is an added feature in a life insurance policy that stipulates that if the policy owner’s child dies, they will receive a small payout from the life insurance provider.
Understanding child riders
Children generally don’t need life insurance since they don’t earn an income that would need replacing and don’t have financial responsibilities. But that doesn’t mean that losing a child is inexpensive.
For starters, most parents want to give their children a funeral. That can cost thousands of dollars.
Additionally, the parents may want or need to take time off work as they mourn. All told, this season of grief is not one in which the parents want to be financially stressed.
To that end, some life insurance companies allow parents to add child riders to their life insurance policies. These optional policy add-ons usually come with a relatively small cost.
How child riders work
With a child rider in place, the death of any of your children will trigger a payout from the life insurance company. That payout won’t be nearly as large as the death benefit for the policy, but it should be enough to cover funeral expenses or other financial needs.
A single child rider is sufficient to cover any children you have and, in many cases, any future children you have.Most insurance providers have age restrictions on their child riders. At a certain point, your children will age out of this policy benefit.
Your child most likely won’t need to get a medical exam to be added to this policy rider, but you might need to fill out a medical questionnaire about them.