One thing I have noticed writing life insurance policies for parents are the lack of child rider life insurance policies. Most people give me a funny look when I bring it up. Child rider life insurance is by far the most affordable way to insure your children, especially if you have two or more children. I know some people feel it is too morbid to think about such things, but reality is children do die and a sudden death coupled with an expensive funeral can devastate a young family.

A child rider life insurance policy is a rider on some term life insurance and most whole life and universal life insurance policies. It is an affordable adds on to a parent’s life insurance policy that for one low premium will cover all of the children in the family for the same price. You can purchase as high as $50,000. The most common face amount is $10,000 regardless of the parent’s face amount. The cost for unlimited children to be added is around $4.30 to $6.00 per month depending on the company. Whether it is for one child or eight children or even more the cost is the same. For example, by breaking down the $5.00 premium to a family with four children it equates to $10,000 per child for $1.25 each. There are a lot of life insurance companies that sell $10,000 whole life plans for ten times that amount on children. They also tout whole life for college savings which in eighteen years will be very little towards rising college tuition.

Another great feature of the child rider life insurance policy is that most life insurance companies that offer this rider will guarantee each child the option of converting the policy to up to five times that face amount without proof of insurability. Some companies allow even larger amounts.  This not only protects the parents in case of an untimely death of their child but also protects the child’s insurability in the future.  For example, the parents decide to purchase a child rider with a $10,000 face amount shortly after the child’s birth. At age 17, the child develops Hodgkin’s disease and is now uninsurable for life insurance. The child now has the option at age 18 to convert the $10,000 rider to a permanent $50,000 in life insurance coverage without proof of insurability or underwriting.

If you have not had your life insurance policy reviewed in the last two years, we highly recommend you contact your life insurance agent. This is especially true for young families having children. The child rider life insurance policy is an affordable but necessary piece of a sound financial plan.

“The greatest gifts you can give your children are the roots of responsibility and the wings of independence.”—Denis Waitley

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yourfriend4life.com

Tim Wilhoit is owner/principal of Your Friend 4 Life Insurance Agency in Nashville, TN. He is a family man, father of 3, entrepreneur, insurance agent, life insurance broker, salesman, sales trainer, recruiter, public speaker, blogger and team leader with over 27 years of experience in sales and marketing in the insurance and beverage industries.