Many term insurance policies allow customers to carry a child rider that provides $10,000 to $20,000 of insurance for the child, advises the American Pregnancy Association. The child's parents or beneficiary receive benefits in the event the child dies.
Child riders are generally low-cost and may not increase the parent's premium at all, states the New York Department of Financial Services. Parents can add riders to cover newborn and adopted children. If the child dies, parents can use benefits to pay for the child's funeral expenses or to cover the child's medical bills, states the American Pregnancy Association.
For some policies, a children's rider covers all children in the family and automatically adds coverage as children are born, states State Farm. In other cases, children must be at least 14 days old before being added to a term-life policy, states the Texas Department of Insurance. Some insurance companies require a medical examination before adding children to the policy, advises the American Pregnancy Association.
Most insurance companies cover the child until he is 21 or 25 years old, states the Texas Department of Insurance. Some policies allow children to convert their child rider into an adult life insurance policy when they reach the age of 21, states American Pregnancy Association.