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Traditional life insurance policies help protect your loved ones by providing financial help to your designated beneficiaries if you pass away. However, you can also apply for coverage for yourself if one of your dependents passes away. This type of policy is called dependent life insurance, and it can provide you with added peace should the worst happen. This article explains how dependent life insurance works and discusses some pros and cons to help you see if applying for coverage is worth it.
Dependent life insurance is a type of life insurance that pays a death benefit to the policyholder if a covered dependent, such as a spouse or child, passes away during the policy term. Policies can be offered through workplace group plans in $2,000 increments. They are designed to cover final expenses, such as funeral costs and travel to the funeral, so death benefit payouts tend to be smaller. For example, a group plan may offer $2,000 per dependent.1
Family members who rely on your income may qualify as life insurance dependents. Here are a few people you could name on your policy:2
The definition of spouse for dependent life insurance purposes may vary but includes anyone the state recognizes as your spouse. For example, if your state recognizes common-law marriage and your relationship meets your state’s definition, your spouse may qualify as a dependent.1
Any children for whom you are a legal guardian can qualify as dependents for dependent life insurance purposes. That includes biological children, adopted children, and stepchildren. However, dependents may lose eligibility at age 26, similar to how health insurance works. There may be exceptions in some cases, such as if you have children with disabilities or other unique needs.2
Older parents may qualify as dependents if you provide care and assistance for them, but plans may vary in coverage and eligibility. In general, if your parents depend on you financially and live with you, they may qualify as dependents.1
The Servicemembers Group Life Insurance (SGLI) program offers military members dependent life insurance to cover their dependent spouses and children through Family Servicemembers’ Group Life Insurance (FSGLI). FSGLI offers a budget-friendly alternative to traditional group policies, helping military members choose cost-effective coverage for their dependents.
Don’t wait until it’s too late. Help cover yourself and your family with coverage from Aflac.
There are several pros and cons of dependent life insurance that you should consider when deciding if a policy is right for you. Here are the advantages this policy offers:2
Here are some drawbacks of dependent life insurance:
The dependent life insurance death benefit may not be taxable if you pay all the premiums or if the employer pays for part of the coverage. That said, the policy itself may be a taxable benefit, depending on the amount. If your employer pays some of the premiums, and the coverage for a dependent exceeds $2,000, the full policy amount may be taxable as imputed income.2 Because situations vary, your financial or tax advisor can advise you on your situation.
Dependent life insurance can be a helpful workplace benefit. If a loved one passes away, it can allow you to grieve and reduce financial strain. These can be a great choice if your employer offers them but may not offer enough coverage on their own. A life insurance policy from Aflac can help ensure some financial protection for you and your loved ones. Speak with an agent today to explore your options and get a quote.
1ValuePenguin - What is Dependent Life Insurance? Who Qualifies as a Dependent for Insurance? Updated January 10, 2024. https://www.valuepenguin.com/dependent-life-insurance. Accessed May 9, 2024.
2Bankrate - What is dependent life insurance? Published July 11, 2023. https://www.bankrate.com/insurance/life-insurance/dependent-life-insurance/. Accessed May 9, 2024.
Content within this article is provided for general informational purposes and is not provided as tax, legal, health, or financial advice for any person or for any specific situation. Employers, employees, and other individuals should contact their own advisers about their situations. For complete details, including availability and costs of Aflac insurance, please contact your local Aflac agent.
Aflac coverage is underwritten by American Family Life Assurance Company of Columbus. In New York, Aflac coverage is underwritten by American Family Life Assurance Company of New York.
Aflac life plans - 68000 series: In Arkansas, Idaho, Oklahoma & Virginia, Policies: ICC1368100, ICC1368200, ICC1368300, ICC1368400. In Delaware, Policies A68100-A68400. 65000 series: In Virginia, Policies ICC0965JTO & ICC0965JWO. B61000 series: In Arkansas, Idaho, Oklahoma & Virginia, Policies: ICC18B61JWO & ICC18B61JTO. In Delaware, Policies B61JWO, B61JTO. B60000 series: In Arkansas, Idaho, Oklahoma & Virginia, Policies: ICC18B60C10, ICC18B60100, ICC18B60200, ICC18B60300, & ICC18B60400. Q60000 series/Whole: In Arkansas & Delaware, Policy Q60100M. In Idaho, Policy Q60100MID. In Oklahoma, Policy Q60100MOK. Not available in Virginia. Q60000 series/Term: In Delaware, Policies Q60200CM. In Arkansas, Idaho, Oklahoma, Policies ICC18Q60200C, ICC18Q60300C, ICC18Q60400C. Not available in Virginia.
Aflac Final Expense insurance coverage is underwritten by Tier One Insurance Company, a subsidiary of Aflac Incorporated and is administered by Aetna Life Insurance Company. Tier One Insurance Company is part of the Aflac family of insurers. In California, Tier One Insurance Company does business as Tier One Life Insurance Company (Tier One NAIC 92908).
In AR, DE, ID, OK and VA: Policies ICC21-AFLLBL21 and ICC21-AFLRPL21; and Riders ICC21-AFLABR22, ICC21-AFLADB22, and ICC21-AFLCDR22. Aflac Final Expense policies are not available in New York.
Coverage may not be available in all states, including but not limited to DE, ID, NJ, NM, NY or VA. Benefits/premium rates may vary based on state and plan levels. Optional riders may be available at an additional cost. Policies and riders may also contain a waiting period. Refer to the exact policy and rider forms for benefit details, definitions, limitations, and exclusions.
Receipt of accelerated death benefits may affect eligibility for public assistance programs. Benefits may also be taxable, and are not expected to receive the same favorable tax treatment as other types of accelerated death benefits that may be available.
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