It is an unfortunate fact that many life insurers will decline special needs children because of their health condition. Which means getting a term life insurance child rider for special needs kids can be extremely difficult. We have only found one company that will cover any child, no questions asked.
Medical experts estimate that between 15% and 18% of all children in America suffer from a chronic medical condition. Serious childhood health issues can occur anytime. Starting before the child is born or they can develop later into adolescence.
Parents who have a special needs child can find that providing life insurance for their child anywhere from frustrating to nearly impossible.
It’s hard enough coping with a long term or potentially life threatening condition for your child. Yet ensuring that your child is protected through a term life insurance child rider for special needs can help alleviate this stress and help your child as they grow up.
The Term Life Insurance Child Rider Explained
If you are not familiar with a children life insurance rider, this rider is simply a form of extra life insurance that you buy in addition to your own life insurance policy. This rider can cover multiple children.
Also, each parent can buy a policy and a rider separately so you both can get double coverage for a special needs child.
Children riders are generally available with both term and permanent life insurance policies. We recommend term child riders because term insurance is so much more affordable. Pricewise, these term child riders only run a few extra dollars per month.
You can buy these riders in increments of $1,000 and pay a bit more for each increment increase.
Now this part of the policy is a rider. A rider is simply an addendum to a normal life insurance policy. Which means you cannot get the rider by itself, it must be attached to a policy. Most insurance companies have a minimum death benefit amount requirement before they will allow the addition of a child rider.
Abrams Insurance can help because we know of one particular life insurance company which does not underwrite children riders. This means that any child with an uninsurable medical condition can find coverage – both now and for the rest of their life. If you have any questions, you can reach us at 858-703-6178.
Can Life Insurance Companies Decline a Special Needs Child for a Child Term Rider?
Unfortunately for most life insurance companies, the answer is yes. Major conditions which are common causes for declining a life insurance child rider for special needs children are listed below:
- Congenital heart problems
- Spina bifida
- Cystic fibrosis
These are the most common reasons for a decline. There are too many other serious health risks to list here which can also result in a decline.
The majority of life insurance companies will ask questions about the status of your child’s health before they will underwrite this rider. A serious medical condition can result in an automatic decline.
Fortunately, this approach does not apply to every life insurer.
How a Life Insurance Child Rider for Special Needs Can Help
Unfortunately, there are many children who may not ever recover because of their pre-existing condition. This does not mean that they will not build a productive life nor raise a family.
However, unless they can access a Group Plan through their employer, odds are any plan they might qualify for will be exorbitantly expensive. Or the company may decline them altogether.
As their guardian, you can get your special needs child with a congenital heart disorder covered under a term children rider. You must do so while they are still under the required age.
A term children life insurance rider is important for special needs children because they will be able to carry life insurance coverage into their adult lives. The reason is because most children riders allow you to convert the policy to a permanent policy. This means that your special needs child with spina bifida for example, will have life insurance coverage for their lifetime and will be able to protect their own family later on.
Reasons Why Principal Life Insurance has the Best Term Life Insurance Child Rider for Special Needs Kids
The company which we often recommend here at Abrams Insurance Solutions for many special needs children is Principal Life Insurance Company.
The main reason why we especially like Principal Life Insurance Company for special needs children is that they do not underwrite their child riders. The application asks no medical questions whatsoever.
Principal will cover any child. The term child includes a stepchild or a legally adopted child. The child must be older than 14 days after birth and less than 18 years of age at the time of application.
Children born after the date of application for the children rider can also be considered. This also includes adopted children under the age of 18 years of age.
The available coverage for Principal’s term children rider is from $5,000 -$25,000 in coverage. Coverage is purchased in units of $1,000. You would have to buy a minimum of 5 units for a total of $5,000 face value. Each parent who has a policy with Principal can buy separate children riders which can double their overall coverage.
The person purchasing the rider must be ages 20 – 55 to qualify.
No claim filed after 2 years of the policy in force of the effective date will be denied except for non-payment of premium.
The Principal Term Children Rider also has a conversion feature. This allows the policy holder to exchange coverage for any Principal permanent life insurance product in effect at the time. The new policy will be issued at “Standard” rates and allows you to increase coverage up to 3x the original death benefit (to a max of $25K). You must do so no later than policy anniversary following child’s 25th birthday, or the insured’s (parent or legal guardian’s) attained age 65 or insured’s death.
An Abrams Insurance Solutions Success Story
Last year a couple approached me about life insurance for their 2 year old. This was a special case because 4 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 life.
With her specific condition, I knew nearly every insurance company will decline coverage for her. But her parents realized after this close call that they don’t have the cash to pay for a funeral or medical debts. Even though her parents are financially middle class, they invest the majority of their extra money in retirement and college funds. So the couple dollars a month for life insurance are easy to come by, even though they don’t have pools of cash.
Principal Life Insurance came to the rescue. They are able to offer a life insurance child rider for special needs children (or any child) because they do not underwrite that rider. That means no health questions are asked. No medical exams are taken. Just coverage approval.
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 unforeseeable accident occur. When she turns 25, they can convert her term plan to 3x the current coverage. So at 25, she can have a $150,000 policy to cover herself, any remaining student loan debt, and her own family.
How Abrams Insurance Can Help Find Best Term Life Insurance Child Rider
Our primary advice is that you should always use an independent life insurance agent. Independent agents can work with whatever company will be best for their client. As opposed to a captive agent who can only sell the products of one company.
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. If we don’t think one company is underwriting our client fairly, we will push for better rates. If that fails, we can easily try for another offer from a more amenable company.
Our independent agents can perform all the comparison shopping for you so you save time and money. We can help find you the best coverage and 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. The call is completely confidential and there is never any obligation to buy.