
Dependent term life insurance is a type of life insurance that provides coverage to your loved ones in the event of your passing.
This coverage is typically used to replace your income and help pay for daily expenses, such as rent or mortgage, utilities, and groceries. The policy pays out a death benefit to your beneficiaries, which can help them maintain their standard of living.
The coverage period is usually tied to your employment, meaning it ends when you leave your job. This can be a concern for those who plan to retire or change careers.
Dependent term life insurance is often offered as a benefit by employers, but it can also be purchased individually.
What Is Dependent Term Life Insurance?
Dependent term life insurance is a type of voluntary or supplemental insurance that pays a death benefit or the policy's proceeds if a covered spouse, child, or another dependent dies.
This coverage is often obtained through an employer, but you can also purchase it as a standalone policy or an add-on to your traditional insurance policy.

A dependent term life insurance policy can be added to your existing policy at an extra fee, making it more cost-effective than a standalone policy.
This type of insurance guarantees your dependent's ability to get insurance in the future, similar to a child term rider that's added to your policy.
Types of Dependent Term Life Insurance
There are several types of dependent term life insurance, each offering unique benefits to policyholders.
Spousal term life insurance is designed to provide coverage for a spouse and any dependent children.
Child term life insurance is specifically for minors, often used to cover funeral expenses or other costs associated with a child's death.
Other types of dependent term life insurance include coverage for domestic partners and other dependent family members.
Employee-Paid Age-Graded Optional
As a new employee, you can elect coverage up to three times your salary without providing any medical history or proof of good health. The maximum amount available during your first calendar year is $300,000.

You can increase your coverage by one times your salary each year during the annual open enrollment period without providing medical history or answering health questions. The maximum amount may be increased each year up to the lesser of eight times salary or $1.5 million.
The coverage is issued by Unum and includes a Travel Assistance benefit. After age 64, you can't increase the amount of your optional employee term life insurance, except that it will continue to increase as your salary increases, subject to any amount limitations due to age, as long as you are actively at work.
Here's a breakdown of the reduction rates for original amounts of insurance after age 65:
Basic
Basic dependent life insurance is often automatically provided as part of an employee benefits package.
Many employers fully or partially subsidize the premiums for basic dependent life insurance.
Typically, basic dependent life insurance covers children in the amount of $1,000 to $5,000 per child.
The coverage amount is often predetermined by the employer, offering a standard level of protection for employees' dependents.
Who Needs Dependent Term Life Insurance?

If you're a parent, you might want to consider getting dependent life insurance to cover funeral and other related expenses if a child passes away. This can be a huge weight off your mind, especially if you have young children.
Dependent life insurance can also be a good idea for people with spouses. It can help protect against the financial impact of a partner's death, which can be devastating. This can provide peace of mind for couples who are building a life together.
Employees who have access to affordable dependent term life insurance through an employer's group plan might also want to consider adding it. This can be a cost-effective way to provide coverage for your loved ones.
Here are the categories of people who might consider getting dependent life insurance:
Employer-Sponsored
Employer-sponsored dependent insurance is a great option to consider. Your employer may offer dependent life insurance as part of your group life insurance benefits.

Coverage specifics vary by employer, so be sure to speak with the human resources department to learn more. You can typically have your premiums deducted from your paycheck.
Employer-sponsored insurance for children usually provides a small death benefit to pay for end-of-life costs, ranging between $5,000 and $20,000.
One benefit of choosing group life insurance over private insurance is that it's offered to all employees, making it easier for dependents with pre-existing conditions to get coverage.
Who Needs Coverage?
If you're a parent, you might want to consider getting dependent life insurance to cover funeral and other related expenses if a child passes away. It's a tough reality, but it's essential to think about the financial impact on your family.
If you have a spouse, protecting against the financial impact of a partner's death is a good idea. Dependent life insurance can help ensure that you're prepared for the unexpected.
If you're an employee, check if your employer offers dependent term life insurance as an add-on to their group plan. It could be a worthwhile option if it's affordable.
You can consider the following types of individuals as dependents for dependent life insurance:
- Spouses: Legally married partners.
- Children: Biological, adopted, and sometimes stepchildren, usually up to a certain age (often 26 years or less, depending on the policy), can be considered dependents.
- Other dependents: Some policies may cover other dependents such as elderly parents or domestic partners.
How Dependent Term Life Insurance Works
Dependent term life insurance provides temporary coverage, usually between ten and 30 years, for your loved ones.
You'll pay a premium for this coverage, which is a cost of owning the policy.
If your dependent passes away during the term, you'll receive a death benefit, providing financial security for them.
Term life insurance can be purchased through work or an insurance company, offering flexibility in how you obtain the coverage.
Some of the best term life insurance policies allow you to convert term to whole life insurance, extending the coverage beyond the initial term.
This conversion option can be a valuable feature, especially if your dependent's needs change over time.
Benefits and Financial Protection
Dependent term life insurance offers a range of benefits that can provide financial protection for your loved ones.
The average funeral costs around $10,000, which can be a significant financial burden.

Having a dependent life insurance policy can help cover funeral and burial costs, which can be substantial and often come unexpectedly. According to the National Funeral Directors Association, the average cost for a funeral with a viewing and burial is nearly $8,000.
Dependent life insurance can also help pay off outstanding debts, which can be a significant relief for your loved ones. Nearly half of American adults expect that, if they died today, their loved ones would inherit their debt.
A death benefit from a dependent life insurance policy can help replace lost income if a spouse passes away. This can be especially important for families with children, as it can help cover childcare and education expenses.
Here are some examples of how a death benefit can be used to cover various expenses:
Cost and Enrollment
Dependent term life insurance can be a valuable addition to your existing policy or your employer's benefits plan. The cost varies widely depending on the coverage amount and the insurer.

You can expect to pay premiums through payroll deductions. The cost will depend on the coverage amount, the dependent's age, the type of dependent (spouse vs. child), and health status.
Typically, employees pay the full premium for dependent term life insurance. Employer contribution is usually none.
Coverage amounts can range from $5,000 to $250,000 or more, depending on the plan and what the employee selects. For example, spouse coverage can range from $10,000 to $250,000 or more, while children's coverage can range from $5,000 to $25,000 or more.
You can select the coverage level based on your needs and budget. It's essential to review your finances, worst-case scenarios, and insurance premium costs to decide if it's worth getting.
Here's a breakdown of the enrollment process:
- Enrollment is optional for the Spouse/Partner and Dependent Voluntary Term Life Insurance.
- If you don't want to elect this coverage, you'll select option 90 from the drop-down.
- Select the option code from the drop-down that corresponds to your coverage choice.
- No beneficiary designation is required, as the primary beneficiary will always be the employee, and the contingent beneficiary will always be the insured's estate.
Other Features and Considerations
Adding dependent life insurance to a policy is usually easy and inexpensive, especially when it's through an employer.
Coverage typically begins immediately, which is a big plus.
If you have an employer-provided policy, be aware that it may not follow you if you leave that job, so it's essential to know your options.
You usually have a choice to opt in or skip the coverage if it's through your work, but it's worth reviewing the insurance premium costs to decide if it's worth it.
Remember, dependent life insurance may not be suitable for all households, so review your finances and worst-case scenarios to make an informed decision.
Other Features
Dependent life insurance is often easy and inexpensive to add to a policy, especially when it's through an employer.
Coverage usually begins immediately, which can provide peace of mind for those who rely on you financially.
You should be aware that these policies have a limited scope and shouldn't be relied on to cover all of your financial needs or provide long-term security.
If you have an employer policy, it's essential to know what your options will be if you leave that job.
Is It Worth It?

Dependent life insurance can be a valuable addition to your financial safety net, but it's essential to consider the pros and cons before deciding if it's worth it.
One of the key benefits is that it's usually easy and inexpensive to add to a policy, especially when it's through an employer. Coverage usually begins immediately.
However, if you're considering dependent life insurance, be aware that it's often limited in scope and may not cover all of your financial needs or provide long-term security.
You should also know that if your dependent life insurance is through your work, you may not be able to take it with you if you leave that job.
Here are some factors to consider when deciding if dependent life insurance is worth it:
- Additional financial protection: Dependent life insurance can provide a financial safety net for unexpected expenses related to a dependent's death.
- Peace of mind: Having insurance can ease the worry and financial pressure that comes with dealing with the death of an immediate family member.
- Low cost: Dependent life insurance is usually low-cost since it's an add-on to an existing policy or obtained through an employer.
On the other hand, you should be aware that dependent life insurance is limited in coverage amounts compared to standard life insurance policies.
Frequently Asked Questions
What is the difference between basic life insurance and dependent life insurance?
Basic life insurance pays out upon the policyholder's death, while dependent life insurance pays out upon the death of a designated non-income earning dependent, such as a spouse or child
Sources
- https://hr.psu.edu/current-employee/benefits/insurance/life
- https://www.businessinsider.com/personal-finance/life-insurance/what-is-dependent-life-insurance
- https://www.ethos.com/life-insurance/dependent-life-insurance/
- https://benefits.georgetown.edu/dependent/
- https://hr.uiowa.edu/benefits/enrollment/vtl-spouse-depend
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