LIFE INSURANCE RIDER
Terminal Illness Rider & Accelerated Death Benefit
Is a child life insurance rider a good fit for me?
- You have children between the ages of 15 days and 18 years old.
- You have a Fidelity Life finalexpensedirects Life term life policy and want an additional benefit ranging from $5,000-$25,000.
- You would like to ensure funeral costs or time off work are covered in case of the loss of a child.
What is a child rider on life insurance?
Standalone life insurance policies are designed to help cover expenses, like replacing lost income, if you pass away. A child rider can be added to your policy to provide a death benefit if your child passes away while your coverage is in force. Should your child pass, a child rider can help cover the costs of funeral expenses. It can also provide a financial cushion so you can take time off from work. This time off gives you a grieving period as well as an opportunity to care for the rest of your family.
A child rider works like a supplemental policy that can be added to your Fidelity Life insurance policy. It provides a benefit ranging from $5,000-$25,000 if one of your children were to pass away while your policy is in force. The rider covers birth children, adopted children and stepchildren equally between the ages of 15 days through 18 years old. Your coverage on each child will end either on their 23rd birthday or when your policy ends, whichever comes first.
Why add a children’s rider to a life insurance policy?
Adding a child rider to your life insurance policy can offer important protection in case of a loss now, while also providing a possible financial resource for your child later on in life.
As a parent, you do everything you can to protect your family at every step. Yet the unexpected can happen at any time. If a tragedy struck your family and your child died, a child rider for life insurance could give you the freedom to focus on your family’s needs during an incredibly difficult time, without worrying about the financial challenges that can come with death.
While your child doesn’t likely contribute to the family’s income, their sudden loss can still stretch your family’s finances significantly. The payout from a child rider comes with no strings attached, so your family can use it however you need.
Beyond these financial benefits, child riders also provide a financial tool that your child can bank on later in life. With Fidelity Life, your child can convert this rider into their own permanent life insurance policy either when the original policy expires or when they turn 23, whichever happens earlier. This can be an affordable way to help your child to start building financial stability long before they’re out on their own.
Reasons to buy a children’s term rider
Adding a children’s rider to life insurance can offer benefits to your family and your child that extend well beyond their childhood. Consider the most common benefits of a child life insurance rider:
- Protect against the unthinkable. There’s no easy way around it: The loss of a child is a devastating incident that can leave you at risk financially. With a rider in place, your family can ease some of these financial burdens. You can provide for their final arrangements as you see fit. These funds can help you tackle unexpected medical bills and other end-of-life financial needs. They may also enable you to take some time off work, so you can grieve in your own way.
- Protect your child’s insurability. A child rider isn’t just about your needs today, but also about the long term. Once your son or daughter has a child rider on term life insurance in place, you’ve secured their insurability no matter what the future holds. Once they grow up, they can convert it into their own policy down the road. That way, they’ll have guaranteed coverage even if they develop a medical problem later that otherwise could have limited their access to coverage.
- Protect their financial future. Beyond guaranteeing their insurability, recognize the financial stability a life insurance policy can offer to your child. The children’s term rider could be converted into a standalone permanent policy for your child later. That allows them to build a source of funds to use for expenses and financial goals throughout their lifetime, from paying for college to making a down payment on their first home. Permanent life insurance policies with cash value can grow significantly over time, providing this type of financial support.
Is a child rider on term life insurance right for me?
Before you purchase a child rider, think about your overall goals in buying life insurance. Life insurance is meant to provide financial protection for your loved ones if something happens to you. Your primary goal should be to find a plan that helps protect against the financial burden of your own death. Remember that, in many cases, you’ll purchase a life insurance policy to help cover your children’s financial needs if you pass away.
Once you’ve focused on your own financial security, weigh the pros and cons of purchasing additional coverage for your child. The primary concern for many people is the child rider life insurance cost. Since riders are extra features added to your policy, they can mean higher premium payments. Ask your agent about the cost of a child rider to determine if it makes sense to you financially.
As long as you have the resources to pay for it, a child rider can be a smart financial decision. It’s also often less expensive than buying a standalone child’s insurance policy, while still providing substantial coverage. With Fidelity Life, you can purchase up to $25,000 in coverage through a child rider. For many people, that money can make a big difference in covering end-of-life needs.
If you’re considering a child rider, take a few minutes to discuss your options with your life insurance agent. They can help you weigh the benefits and costs so you can make the best choice based on your family’s situation.
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Quick Answers to Common Questions
What Is a Life Insurance Rider?
How Does an Accelerated Benefit Rider Work?
If you are diagnosed with a terminal illness and expected to have a short life expectancy, an accelerated benefit (or terminal illness benefit rider) rider will allow you with withdraw a portion of your normal death benefit. You may withdraw up to the lesser of $100,000 or 50% of the death benefit. The rest of your death benefit remains payable to your chosen beneficiaries upon your death.
You can use this money however you see fit. If you survive longer than doctors expected, nothing changes – your life insurance still remains in effect. You will still pay your premiums, and your remaining death benefit will stay in effect. It’s best to consult with a tax professional to better understand any tax consequences of an accelerated death benefit.
When Can I Use an Accelerated Death Benefit Rider?
Can I Add an Accelerated Benefit Rider to an Existing Fidelity Life Policy?
No. An accelerated benefit rider must be provided when the policy is purchased, and cannot be added at a later date.
Can I Add an Accelerated Benefit Rider to an Existing Fidelity Life Policy?
If you receive a terminal diagnosis from a medical professional and have an accelerated benefit rider, you can use the money any way you see fit.
You may use it for medical care or to enhance your comfort while you’re ill. You can use it to work less or stop working so you can spend more time with your family. An accelerated death benefit can be used for travel. It can be distributed while you’re living to relatives, close friends, and chosen charities. You can even use it to pay off your mortgage or pre-pay your funeral expenses.
What Happens if I Am Diagnosed With a Terminal Illness and Then Die From Illness?
What Happens if I Am Diagnosed With a Terminal Illness but Then Live a More Extended Life Than Expected?
If you receive a terminal illness diagnosis and are given a short period to live, you can withdraw the set percentage of your life insurance policy death benefit per the terms of your accelerated benefit rider. If you then live longer than your initial life expectancy and continue to pay your premiums, your beneficiary receives the remaining death benefit when you pass.
For example, Betsy has a $200,000 life insurance policy with a terminal illness rider. She is diagnosed with end stage renal failure and given six months to live. She withdraws $80,000 (40%) of her death benefit, and distributes it personally to her relatives, closest friends, chosen charities, and pays off some debts. Betsy continues to pay her premiums, outlives her diagnosis, and dies 8 months later. Her beneficiary receives the remaining $120,000 (60%) of the death benefit.
Why Should I Choose Fidelity Life?
Fidelity Life is committed to helping you find the right life insurance. For more than 100 years, we’ve been helping everyday people like you get the life insurance you need and the peace of mind you deserve. Our mission is to work with you throughout your life. Whether just starting out, raising your children, or getting ready to enjoy retirement, we design products with families like yours in mind.
You can feel confident we’ll be there for your loved ones because we carry an A+ rating from the Better Business Bureau as well as an A- rating (Excellent) from A.M. Best Company, the oldest and most widely recognized provider of ratings for the insurance industry.
Our commitment to our customers, and their families, shows up in our innovative products and our top-notch customer service.
How Can I Get Started?
If you want to calculate your life insurance coverage needs, you can use our calculator. Then, we’ve made it simple to get your application started online.
