South Carolina Insurance Practice Exam

What happens to the coverage under a children's term rider when the child reaches a specified age?

1. Coverage is renewed

2. Coverage is doubled

3. Coverage is eliminated

4. Coverage is converted to permanent insurance

The correct answer is: Coverage is eliminated

When a child reaches a specified age, the coverage under a children's term rider typically terminates or is eliminated. This rider is designed to provide life insurance coverage for children, often until they reach a certain age, commonly 18 or 21. Once the child reaches that age, the temporary nature of the rider results in the end of the coverage provided under it. This aspect of children's term riders is important for policyholders to understand, as it means that once the coverage is eliminated, there is no longer any insurance protection for the child unless the policyholder takes additional steps, such as exercising a conversion option if available or purchasing a separate policy. It's a crucial detail because it emphasizes the temporary, rather than permanent, nature of the children's term rider, and aligns with the typical structure of such riders in life insurance policies.