Piggyback Your Children on Your Policy

Piggyback Your Children on Your Policy

Jan 20, 2017

mother-flying-with-son.jpgHave you ever heard of a Children’s Term Rider (CTR)? It is a valuable rider that can be added to a parent’s Whole Life or Term policy. This handy rider covers the lives of all current and even future children born to, or adopted by, the primary insured until they reach the age of 23.

Angel and Cameron have two children, Jordan and Lucy. Angel purchased a $25,000 Whole Life plan for herself and added a CTR for $10,000 that covered her children. Angel just found out that she was going to have another baby, and was happy to know the new baby would automatically be covered as well.

A rider is an additional benefit attached to a policy.

There is a great conversion privilege for Jordan and Lucy (and future baby Ruby), since it allows them to purchase their own permanent life insurance at a future date, without answering health questions. This turns out to be very important because after the policy was originally issued 10 years ago, Jordan was diagnosed with diabetes. If he were to apply for insurance now, he would have to prove insurability and his premiums would be much higher with that diagnosis (if insurable at all).

Conversion means that you can change, or convert, from term (or temporary) coverage with a limited number of years, to a permanent policy that covers the insured’s whole life, without having to prove insurability. This is available at any time up to age 23 for the amount the coverage was originally issued. There is also a special conversion option available twice during the policy. At ages 18 or 23, insureds covered under the rider can buy permanent insurance for up to five times the amount of the rider, without proving insurability. For example with Angel’s rider, her children can each buy up to $50,000 of permanent life insurance without answering health questions when they are 18 or 23 years old.

For $5 per month, you can get the maximum coverage for each child, which is $10,000. The minimum face amount for the base (parent) Whole Life or Term coverage, is $25,000. Your agent can help you select the right plan.

This type of rider is great for covering multiple children right away, when a parent may have limited funds available. As a child term rider, they are also eligible for member benefits. If you know a parent who would love this rider, and need insurance for themselves, give them the name of your agent! Or have them give us a call at 877.935.2467.

Category: insurance

Shannon Daugherty

ACS, FLMI, Member Programs Assistant

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