What Is A Dependent Life Insurance?

Dependent life insurance is a type of insurance policy that pays out for the death of a spouse, child, or other dependents. This type of policy is usually purchased to handle final expenses, and the amount of coverage can be relatively small. 

While it’s easy to think that the death of a stay-at-home spouse or child won’t become a financial burden, it’s just not true. Just think about why a stay at home mom needs life insurance; if you were to lose them, you would immediately need to replace all the things they do, such as: 

  • Childcare
  • Housekeeping
  • Chef
  • Someone to do laundry
  • Event planner
  • Shopping
  • The list goes on.

Not to mention that the national average cost for a funeral is around $10,000, and with the average person not having $3,000 in their savings account, it’s hard to believe we will have money saved for an unexpected funeral.

In general, I would recommend that you have an individual and separate policy for your spouse, especially if the only insurance you have is through your job.

What is the Difference Between a Dependent and a Beneficiary?

People often get dependent and beneficiary mixed up when it comes to life insurance. In order to understand dependent life insurance, you need to understand what a dependent is and what a beneficiary is and how they are two different things.

Dependents

A dependent is someone who depends on you to live. You provide dependents with shelter, food, necessities, and other things needed to survive. They generally don’t work or would not be able to make a living on their own. Examples of dependents include your children or a spouse. It can also be other adults that live with you, are financially dependent on you, and unmarried. An elderly parent is an example of an adult-dependent that is not your spouse. The connection to life insurance is that a dependent can be listed as a beneficiary on a life insurance policy, whoever, not all beneficiaries are dependents.

Beneficiary

beneficiary is someone who will receive your death benefit after you die. They are named on the policy and can also be changed at any time. They can be a dependent person, but they do not have to be. For example, if you listed your sister as a beneficiary, there is a good chance she is not your dependent. She more than likely will have her own living arrangements, her own job, and pays her own bills. When you die, she will receive your death benefits and help pay for your after-death expenses.

What Is Dependent Child Life Insurance?

While they both could be the same individual, they serve two different purposes. 

Dependent child life insurance is a type of insurance policy that will pay out the death benefit of a covered child if they pass away.

Read More – What Is Child Life Insurance? – Best Life Insurance for A Child

No one wants to think about burying a child, but financial hardships come with a child passing away.

Who Qualifies as a Dependent for Life Insurance?

To determine who will qualify as a dependent, you must first check the definitions in your group life insurance policy.  

Most plans let you add a dependent such as your child or spouse as long as they meet specific requirements, and others even allow you to have other dependent adults. 

1: Your Spouse

If someone is recognized as your husband or wife by state law, usually, they can be added as a spouse on your dependent life rider. It can also cover a common-law spouse if your jurisdiction recognized the union. 

A domestic partner (depending on the policy) might not be considered a spouse and could possibly need their own policy. 

2: Children

Your step-kids, biological children, or a  legally adopted child can all be added as a dependent on your life insurance policy.  

These policies tend to last until your kid reaches a specific age, like 18 or 21.  If they are older than the maximum age allowed for kids, you might want to have them obtain their own policy. 

In all honesty, it’s probably a much better option. 

Adult Dependents (Other)

You should look at your policy’s specific vocabulary for more details.

However, most adults who depend on you financially or need assistance with daily living activities could be added as a dependent on your policy. Usually, they must live with you and be unmarried.

Is Dependent Life Insurance Worth It?

Life insurance for children might seem unnecessary since you don’t rely on them financially; however, a dependent’s death will create a financial burden and an emotional burden.

If you don’t have enough savings to cover the burial of a child, your dependent or a spouse, then dependent life insurance is worth it.

There really isn’t any reasons to waste time, you can click here or on any of the above buttons to get started and get your dependents covered.

Conclusion On Dependent Life Insurance

Dependent life insurance is a type of life insurance that you take out to help cover your dependents’ after-death expenses. Dependents are the people who rely on you financially and typically live with you. Dependents can be your spouse, children, or other adults that live with you.
Dependent life insurance usually provides a modest amount of coverage and can not be borrowed or used as collateral for a loan. The most common way to purchase a dependent life insurance policy is through your place of employment. Purchasing a dependent life insurance policy will give you peace of mind and comfort, knowing your loved ones’ final expenses are taken care of.

1 thought on “What Is A Dependent Life Insurance?”

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