Understanding Dependant Life Insurance & How it Works

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Article Contents
By Matthew Roberts
Updated on May 28, 2025

4 minute read

Article Contentstable-of-contents

Most people get life insurance to protect their loved ones’ financial future if they pass away. However, what happens if their loved one passes before them? That’s where dependent life insurance comes in. Keep reading to learn more about dependent life insurance and how it works.

Dependent Life Insurance Coverage At a Glance

  • Dependent life insurance is coverage that pays out if one of your dependents, like your spouse or child, passes away.
  • Most dependent life insurance coverage comes as an add-on for group life insurance policies received through your workplace. 
  • Joint life insurance policies, spousal riders, or individual life insurance policies can be alternatives to dependent life insurance. 

What Is Dependent Life Insurance?

Dependent life insurance is coverage that provides an insurance payout in the case of one of your dependent’s death. Dependent life insurance is primarily meant for your child or spouse, though sometimes elderly or disabled relatives can also qualify for coverage.

How Dependent Life Insurance Works

Dependent life insurance works much like any other life insurance policy. If your dependent passes away, you’ll be provided with a death benefit payment according to what’s listed on the coverage terms. Dependent life insurance can be provided through group life insurance policies, like when you get life insurance from work. 

Who Can Be Added to Life Insurance Policies as a Dependent?

Generally, dependent insurance policies only allow you to add certain people to your policy. Here are the two most common categories of dependents you’re allowed to add to your dependent life insurance protection:

You can put your dependent children under dependent life insurance protection. This includes your biological children, adopted children, and children of your spouse from a previous relationship, as long as the child is living with you. To qualify for dependent protection, the child must be under 21 years of age, unmarried, and not under full-time employment. Children aged 21 to 25 can also qualify for this protection if they’re a full-time college, school, or university student.

Children over 21 years of age who are unmarried and unemployed can still be classified as dependent if they live with a mental or physical disability.

To provide dependent life insurance protection to your spouse, you need to be legally married to that person or have been married through a valid civil or religious ceremony. However, a partner you haven’t legally married yet can still qualify for spousal protection as a common-law partner (as defined by the Employment Insurance Act) if you’ve cohabited with them for at least 12 consecutive months before your dependent protection claim.

Who Qualifies as a Dependent for Life Insurance Coverage.pdf

When Dependent Life Insurance Makes Sense

Dependent life insurance is generally provided through your work insurance. In most cases, you need to pay extra to get dependent protection on top of your own group life insurance coverage. So, dependent life insurance might make better sense if you don’t have any other life insurance protection to protect your loved ones. 

Extra Protection for Dependent Life Insurance Holders

In addition to death benefit coverage for your dependents, there are other protection options you can consider when getting dependent life insurance. Here are some examples:

  • Premium waiver: A premium waiver kicks in if you’ve been approved for a waiver of premium on your main work life insurance coverage. The premium waiver can extend to your dependent life insurance premiums, meaning you get free coverage for yourself and your dependent.
  • Prenatal benefit: Your insurance plan may also offer extra protection if your spouse is pregnant. Should your spouse experience a stillbirth, the coverage will pay out a certain amount of money. While the coverage amount is generally lower than if your living child passes away, the money can still help lighten your financial load.

What to Ask Before Opting Into Dependent Life Insurance

Since dependent life insurance is an extra expense on top of your personal group life insurance protection premiums, it’s a good idea to know more about the protection before opting into it. Some important questions to ask your workplace about dependent life insurance protection include:

  • How much do I need to pay for dependent life insurance protection?
  • How much is the dependent coverage amount?
  • Can I insure my spouse and my children, or do I need to choose between them?
  • Is my spouse/child eligible for dependent life insurance protection?
  • When will the dependent life insurance protection terminate?

Alternatives to Dependent Life Insurance

Dependent life insurance isn’t the only way you can provide insurance protection for your loved ones, because sometimes your group life insurance may not be enough. Let’s take a look at a few alternatives to consider:

Joint life insurance is a type of insurance policy that covers two people, generally purchased by couples and business partners. In joint life insurance, you only need to apply once to protect both policy members. Additionally, you only pay premiums once, which can make budgeting easier.

In joint life insurance, you can choose between two types of payouts:

  • First-to-die, where the insurance pays out if one of the two insured people passes away.
  • Last-to-die, where the insurance pays out if both policy members pass away.

Note that in most cases, the life insurance will terminate after paying out. So if you own a first-to-die policy and your spouse passes away, your life insurance coverage ends. That said, you can purchase joint insurance as a whole life insurance policy to provide lifelong coverage.

When purchasing insurance, you can buy add-ons called riders. Your insurance company may offer a spousal rider, which brings your partner into the same life insurance policy you have. Spousal rider coverage is generally smaller than a standalone policy for your spouse, but it’s often cheaper and easier to set up.

Another option is to get individual life insurance policies for all your loved ones. It may be more trouble to purchase policies since your spouse and children may need to undergo health tests and underwriting individually, but that means your entire family has their own life insurance coverage. 

In the case that any one of you passes away, you’ll likely get the largest death benefit to help the rest settle funeral expenses and medical bills and lighten any financial load that comes with a family member passing away. If you took out a policy for your child, you can transfer its ownership to them once they can pay the premiums.

That said, even if all of you qualify with flying colours and get the lowest premiums, you’ll probably still pay a fair bit for insurance because everybody has their own policy. If this sounds too expensive, you can consider getting joint policies or riders instead.

Key Advice from MyChoice

  • Dependent life insurance is rarely found as a standalone policy. Ask your workplace if you can add dependent life insurance to your existing group life insurance policy.
  • Before opting into dependent life insurance, ask questions and ensure you know for sure that dependent life insurance will give you the most bang for your buck.
  • You can consider joint policies, spousal riders, and individual life insurance policies if dependent life insurance doesn’t suit your needs.

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