Best Term Life Insurance Child Rider for Special Needs Kids

Many life insurance companies will decline special needs children based on their health conditions. That makes getting a term life insurance child rider for special needs kids extremely difficult. 

This article will cover the policy details for two companies that do not underwrite their term life child riders so that you can skip this particular red-tape frustration. 

For more general information on life insurance for children, use this link.

Let’s start. 

Note: We overhauled this article in May 2022 because the original company, Principal, is pivoting out of the life insurance niche. Now, we’re covering American Amicable and Banner Life, neither of which underwrite their child’s life insurance rider. 

  1. Term life insurance child rider explained
  2. Can life insurance companies decline a special needs child?
  3. How a life insurance rider can help cover special needs children
  4. The best company issuing special needs children’s riders
  5. A success story

Quick Summary

Getting a term life insurance policy with a rider for your special needs child isn’t a challenge, as long as the issuing company does not ask questions about the child’s medical condition. Once the child turns 25, you can convert the coverage into their own life insurance policy. Plus, they are whole life insurance policies that will stay with them forever, regardless of medical issues.

If you have any questions about riders, further underwriting questions, or want a life insurance quote, give us a call at (858) 703-6178. 

The Term Life Insurance Child Rider Explained

A policy’s child rider is simply a form of extra life insurance you add when purchasing a life insurance policy. 

why do i need a life insurance child rider for special needs
It is worth stating that life insurance for a child is not about receiving money if a child leaves this world too soon. It is solely about covering funeral costs and medical bills at a heartrending moment.

Rider means an additional contract feature that typically increases coverage or adds extra circumstances in which the life insurance company would pay a claim. You cannot purchase a rider without a policy, and most companies have a minimum death benefit amount before they allow the addition of a child’s insurance rider. 

The child life insurance rider can often cover multiple children. 

Also, each parent can buy a policy and rider separately. That allows for double coverage on a special needs child since the maximum benefit on these riders is pretty low. 

Children riders can come with both term and permanent life insurance policies. We recommend term child riders because term insurance is so much more affordable. Pricewise, these riders only cost a few dollars per month. 

Typically, life insurers offer these riders in benefit increments (units) of $1,000, and you pay a set amount for each unit. 

Can Life Insurance Companies Decline a Special Needs Child for a Child Term Rider?

Yes, they can. Most do. The most common causes of a company declining a child rider are:

  • Autism
  • Congenital heart problems
  • Spina bifida
  • Cystic fibrosis
  • Cancer

While these are the most common reasons for a decline, too many other serious health risks will also trigger a decline. 

Virtually all life insurance companies will ask about your child’s health status before they will underwrite this rider. 

Fortunately, not every company asks about your child’s health when you add a child’s rider. If they don’t ask, then your child’s health is a non-issue to the company. If your child has health issues, then you will want to use one of the companies reviewed below.

How a Life Insurance Child Riders Can Help Special Needs Kids

Anyone can have what the life insurance industry calls a pre-existing condition. They’re more likely to develop as we get older, but even children can be uninsurable and live long, fulfilling lives. 

Modern-day financial planning involves a lot of risk mitigation through insurance. Life insurance options for special needs children become extremely limited once they reach adulthood. The easiest policy to qualify for will likely be through their employer. 

Any plan that they might qualify for will be exorbitantly expensive. 

As their parent, you can get your child covered under a term child rider, even with the conditions listed above. The only catch is you must get a policy for yourself and attach the child rider while your child is still under 18. 

A term life insurance rider for children is important for special needs kids because they will be able to carry it into their adult lives. Once they turn 18, most riders will allow you to convert the rider into a separate permanent policy.

As an example, if you have a child with spina bifida, they will have life insurance coverage for their entire life and be able to protect a family of their own if they choose to have one. 

The Best Two Life Insurance Riders for Special Needs Kids

Most life insurance companies underwrite their child term riders. They ask medical questions and tend to decline anyone who isn’t healthy. When we know there is a high chance of a decline for a child, these are the companies we turn to. 

American Amicable Life Insurance

We find ourselves frequently recommending American Amicable for many parents of special needs children. 

American Amicable does not underwrite their child riders. The additional form to the application doesn’t ask any medical questions whatsoever. This makes it easy for any child to get coverage. 

Any child can qualify as long as they’re between 15 days and 18 years old when you apply. Adopted children and stepchildren also qualify. 

Children born after the date of application for the child rider can also be considered, including adopted children under the age of 17. 

The amount of life insurance coverage for American Amicable’s child rider comes in $3,000 units up to $15,000. Each unit has an $8.50 annual premium. The maximum of 5 units ($15,000) would be $42.50 in premium payments each year on top of the parent’s policy. 

Coverage lasts until either the insured parent reaches age 65 or the child turns 25, whichever happens first. 

At that time, you (or your child) have the option to convert the child rider into their own permanent policy for up to 5x the benefit amount. The rider’s minimum benefit of $3,000 would turn into a $15,000 permanent policy. The maximum benefit of $15,000 would turn into a $75,000 policy. 

Banner Life

Banner is another option that doesn’t underwrite their child term riders. Like American Amicable, there are no medical questions on the application form. 

Any child between 15 days and 18 years old qualifies, and the rider covers multiple children. You can also insure step-children, and legally adopted children. 

The coverage is straightforward. You choose either $5,000 in benefits for $27.50 per year, or $10,000 in benefits for $55.00 per year. The coverage lasts until the first of either the child’s 25th birthday or the insured’s 65th birthday. 

The conversion option only triggers when the child is about to turn 25 (or insured turns 65), then coverage can be transferred to a permanent policy with the same benefit amount. Both parents can have policies to double the coverage on their children. 

The only other details are the insured must be between 20 and 55 years old at the age of issue, and the rider isn’t available in New York or Maryland. 

An Abrams Insurance Solutions Success Story

low cost term life insurance child rider for special needs

Last year, a couple approached me about life insurance for their 2-year-old. This was a special case because four months before, there had been a car accident involving their little girl. While doctors expect her to grow up and live a long life, the resulting crash injuries caused some developmental health issues that she will carry for the rest of her life. 

With her health condition, I knew nearly every insurance company would decline coverage for her. But her parents realized after the close call that they didn’t have the cash to pay for funeral expenses or medical debts. Even though her parents are financially middle class, they invest most of their extra money in retirement and college funds. So the couple dollars a month for life insurance were a reasonable addition to their budget, even though they don’t have pools of cash. 

We used one of the few companies that did not underwrite the child term rider. That meant no health questions asked. No medical exam. Just coverage approval. The parents were relieved that they wouldn’t have to put their little girl through an underwriting process. 

Together we decided that the parents could each get a $25,000 rider to cover their daughter. In total, she currently has $50,000 in coverage should another accident occur. When she turns 25, they will convert her term plan to 3x the current benefits. So at 25, she can have $150,000 to cover herself, any remaining student loan debt, and her own family.


Is American Amicable a Good Company?

American Amicable was founded in 1910, so they have a long history of handling policies and claims. Length of time in business is a good start to assess the quality of an insurance company. 

More importantly, are the financials any good? 

A.M. Best gives them an A for financial strength rating. That means they’re financially stable and shouldn’t have any problems paying their customers’ claims. 

The Better Business Bureau gives them an A+ rating and accreditation. 

Is Banner Life a Good Company?

Banner Life was originally Government Employees Life Insurance Company (GELICO). Legal & General Group purchased it in 1981 and continues writing life insurance business through Banner Life to this day. 

Currently Legal & General holds an A+ rating from A.M. Best.


Term coverage offers the most affordable way for a parent to secure their family’s financial future. Using a company that does not underwrite the child rider allows coverage for a special needs child at minimal additional cost. Then, once the child reaches 25 years of age, they can convert the rider into permanent coverage for their own policy. The resulting whole life policy will help cover any final expenses decades later or can be transferred to the ownership of a special needs trust.

How Abrams Insurance Can Help Find Best Term Life Insurance Child Rider

Our primary advice starts with always using an independent life insurance agent. Independent agents can work with whatever company will provide the best option for their clients. They aren’t limited to only selling the products of the company that employs them. 

Here at Abrams Insurance, we work for our clients and not the life insurance companies. We have access to over 70 of the top-rated life insurers in the country. We will push for better rates if we don’t think one company is underwriting our client fairly. If that fails, we can easily try for another offer from a more reasonable company. 

Our independent agents can perform all of the comparison shopping for you, so you save time and money. We can help you find the best coverage at affordable rates for a term child rider. It doesn’t matter if your children are the textbook definition of healthy or need a little extra care. 

To learn more about the life insurance child rider for special needs, then call Abrams Insurance Solutions. We are always ready to answer any questions at (858) 703-6178. This call is completely confidential, and there is never any obligation to move forward.