What is dependent life insurance and how does it work in 2021?

Getting life insurance for your spouse or dependent may not be the most urgent thing on your mind right now, and you probably don’t even want to think about another bill.

But listen to me:

Having life insurance for your dependents is very important and can prevent you and your family from suffering financially if they should die.

what is dependent life insurance?

Today I will cover what a dependent life insurance policy is, the difference between a dependent and a beneficiary, how a dependent child life insurance policy works and much more.

What is a dependent life insurance policy?

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 cover the final cost, 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 simply not true.

Think why a stay at home mom needs life insurance; if you were to lose them, you should immediately replace all the things they do, such as:

  • Day-care
  • Cleaning
  • chef
  • Someone to do the laundry
  • Event Planner
  • Shop
  • The list continues.

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

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

What is a dependent? & What is a beneficiary?

AN dependent (in life insurance) is someone you add to your primary life insurance policy, such as a spouse or child, so they can be covered.

AN beneficiary is a person or entity to whom you decide to leave some kind of inheritance in the event of your death, such as a life insurance policy.

For example, your sister probably won’t qualify as a dependent on your policy (unless you take care of her), but she may be the beneficiary of your life insurance policy.

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

What is life insurance for dependent children?

Dependent child life insurance is a type of insurance policy that pays out the death benefit of a covered child in the event of their death.

No one wants to think about burying a child, but when a child dies, financial problems arise.

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How does the spouse’s life insurance through the employer work?

An employer usually offers spouse life insurance as part of your benefits plan. It is often referred to as voluntary dependent life insurance or dependent group life insurance.

This type of insurance covers your spouse, children, or an eligible dependent, based on the rules established in the plan.

If a survivor dies while you are insured, you will receive the death benefit, as the employee is automatically designated as the beneficiary.

The only downside to life insurance through your employer is that you can only get coverage during your job’s open enrollment period.

Sometimes your coverage doesn’t start from day one if you opt for dependent life insurance.

While this is an excellent option if your spouse or dependent cannot be covered in any other way, you may be better off getting a separate term life insurance policy or a no-exam term life insurance policy.

Who qualifies as dependent life insurance?

To determine who qualifies as a survivor, you must first check the definitions in your group life insurance policy.

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

Your husband

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

A domestic partner (depending on the policy) may not be considered a spouse and may require their own policy.

Children

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

These policies usually last until your child reaches a certain age, such as 18 or 21. If they are over the maximum age allowed for children, you may want them to get their own policy.

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

Adult Dependents (Other)

You should check your policy specific vocabulary for more details.

However, most adults who are financially dependent on you or who need help with daily activities can be added to your policy as dependents.

Usually they must live with you and be unmarried.

Is Dependent Life Insurance Worth It?

Child life insurance may seem redundant as you are not financially dependent on it; however, the death of a dependent will cause a financial burden and an emotional burden.

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

There’s really no reason to waste time, you can click here or click one of the buttons above to get started and get your dependents on.

Frequently Asked Questions

Can I add my wife to my life insurance policy?

You can add your wife or husband to your policy as a beneficiary at any time. However, if you want to add them to your policy so they’re covered, that’s a different matter and usually you can’t add them to a policy already in effect.

How much life insurance do I need at work?

Typically, employers offer life insurance benefits based on one to two times your annual income. For example, if you earn $75,000 a year, your employer may provide you with a policy with a death benefit of $75,000 or $150,000.

Can you have two separate life insurance policies?

Yes, you can have multiple life insurance policies with the same or different life insurance companies. You can have group life insurance through work, individual term life insurance outside of work, and full life insurance with another company. It is even possible to have two separate term life policies with different terms with the same company.

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