Riders Covering Additional Insureds Flashcards
Children’s Term Rider
What can children do when their policy ends at age 18, 21, or 25?
A common approach to setting children’s term rider limits is to
- issue the rider for a specified amount (such as $5,000 or $10,000)
- issued for a specified percentage of the amount of coverage on the primary insured parent’s base policy (such as 20 percent).
Many children can be covered under a single children’s term rider. But, the coverage ends at age 18, 21, or 25.
- when coverage ends for any covered child, the child can convert the coverage to any permanent life insurance policy
- evidence of insurability is not required.
- new policy face amount can be up to some multiple of the term life insurance coverage, such as five times the term amount.
For example, a child who has $5,000 of coverage under a children’s term insurance rider could convert to a permanent life insurance policy of up to $25,000.
What is a Family Term Rider?
A family term rider is an alternative to either a separate spousal rider or separate children’s rider. This rider covers multiple family members (spouse plus children) equally with term insurance.
Children covered by this rider can convert their coverage to permanent coverage at age 21 without proof of insurability. Typically, the converted policy’s face value can be up to five times the coverage under the family term rider.
