What does Dependency Insurance Consist Of?

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It is considered compulsory for the primary breadwinner to get insured. The more life insurance coverage he has, the better for his family, after his death. But people rarely think about how smart it is to insure the spouse, wife or child, too.

The life insurance which covers the non-earning spouse, at-home-wife, and the child, is called dependency insurance or dependent life insurance. Where the purpose of insuring the head of the family is to leave some insurance inheritance for his loved ones. The aim of buying separate dependent life insurance for your wife or child can be very rewarding.

  1. Why should you buy dependent life insurance for your wife or child?
  2. What is the average cost of a dependent life insurance?
  3. What is dependent life insurance?
  4. What is the difference between a dependent and a beneficiary?
  5. What is dependent child life insurance?
  6. How does spouse life insurance by employer work?

Why should you buy dependent life insurance for your wife or child?

Usually, the death of a husband can lead to getting the life insurance payout for the wife and child. But should you not be prepared for the death of your wife or child before your own? Rings a bell! If God forbid a wife dies, it can be emotionally stressful but the financial cost of her replacement is also very high.

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A 2018 study by Foresters Financial revealed that 84% of Americans believe that most people need life insurance, 68% thought that they personally needed life insurance, while 59% of Americans actually have some form of life insurance.

Again another recent study showed that the average savings in any American’s account is up to $3,000. And according to the NFDA National Funeral Directors Association, the average cost of a funeral is nearly $10,000 in 2023. If the wife or child dies, and you have not insured them separately, obviously you will be devastated. Emotional sorrow is one thing and arranging funds for a funeral is another. It is always better to be prepared!

What is the average cost of a dependent life insurance?

Average cost is as low as around $50 per month for one dependent. Let’s say you have a wife and 2 children, who you have insured with separate dependent life insurance policies. You will pay $50 every month for each of them if you have bought a $50,000 coverage dependent life insurance policy for them.

What is dependent life insurance?

Dependent life insurance definition: It covers your stay-at-home wife and kids. Why should you opt for it? Is it worth it? Well! Though it seems like accessorizing, believe me. Dependent life insurance is awfully important. Let’s see how?

You think if your house wife or child dies, God forbid, it’s not going to get tough financially. You are absolutely wrong. Think of the services your house wife provides free of cost:

  1. Laundry
  2. Housekeeping
  3. Childcare
  4. Chef
  5. Shopping
  6. Event planning

Single payment for childcare every month is going to cost you a lot of fortune, after her death. It is smart and proactive to insure the wife and children with the dependent life insurance, individually. Firstly, you have to pay for a funeral, $10,000.

Secondly for the laundry, housekeeping, childcare, chef, shopping and event planning after the death of a housewife. Even if you borrow a loan from the cash value component of your own life insurance, it will not be enough to cover the expenses.

What is the difference between a dependent and a beneficiary?

A beneficiary is anyone you name in your own life insurance policy. You can name your mother, your sisters, your brothers, your wife, your partner, your adult child, your cousin, a charity, or an estate.

But a dependent can be only your immediate blood relations. This includes your wife and your children. For a dependent you buy a separate life insurance or you purchase a rider or add-on on your personal life insurance policy.

What is dependent child life insurance?

This insures your child till the age of 18-26. Different life insurance companies have different age ranges. In case the covered child dies, his funeral costs are paid by this dependent child life insurance.  This is also important since for separate burial insurance, you have to be 45 years old or older. So for young wives and children, burial insurance is not an option. Instead an individual dependent life insurance is good to go!

How does spouse life insurance by employer work?

There are two terms which define the life insurance for dependents offered by your employer:

  1. Voluntary dependent life insurance
  2. Dependent group life insurance

If and when you work at some company with financial stability, they offer group life insurance to their employees. It is a group of employees who are insured with a term life policy. Similarly, military and reputable private firms offer group life insurance for your wife and child too.

The wife must have legal documents that verify that she is recognized by the state law as the official wife of the employee. And the children must be proved as biological, step or adopted children by state law documents. This is how they become eligible for Dependent group life insurance.

But the biggest setback is that if the employee, the husband gets fired, or moves on to a better job at another firm. He will no longer be liable to get any coverage. If, however, he or his dependent wife or child, died while he was serving at the old office, they would receive a small coverage death benefit.

It is always better to either buy individual dependent life insurance for your wife and child. Or just add-on or rider addition to your own personal permanent expensive policy. Group life for dependents rarely reap any rewards.

Who qualifies as a life insurance dependent?


Anyone who is recognized by the state law as your wife or husband is liable to be added as your dependent life rider.


Apart from your blood children, step-children or a legally adopted child can be listed as your dependents. Obviously for a child dependent, the age limit is 18-21 years. Afterwards it is sensible to buy a separate whole life or term life for adult children. Whole life and term life offer much more coverage and will protect his life and that of his family after marriage.