Thursday, September 10, 2009

Life Insurance Definition of "Dependent"

An insurance company's definition of "dependent" may not be exactly what you think

A life insurance policy is a legal contract between the policy owner and the insurance company.  Understanding the contract in its entirety is essential for proper analysis and financial planning.

One of the common contract definitions that is often a source of confusion is that of the policy owner’s Dependents.  Far too many people are mistaken about the specific definition of a Dependent, and fail to verify the accuracy of their assumptions.

By ensuring proper comprehension of a Dependent, the owner can make educated decisions to most securely protect the entire family.


Most life insurance companies use very similar verbiage in their definition of a Dependent. Typically, there are two types of Dependents acknowledged by life insurance companies – spouses and minor children.

Although other categories of people may be rationalized as dependent upon another person, for the purposes of establishing appropriate life insurance contracts, only spouses and minor children are considered.


Life insurance contracts that provide separate or additional coverage for dependents will only do so for as long as those covered individuals continue to meet the definition of Dependent as written by the insurance carrier. Once the covered person no longer meets the Dependent status, their coverage is typically terminated, or in some cases converted to a formal individual policy.

Most insurance companies will consider a child as a qualified Dependent until the age of 18, unless the child is enrolled full-time in continuing higher education, which results in qualified status until age 23 or graduation from the institution, whichever occurs first.

Spouses are considered qualified Dependents for as long as the couple is formally married.  The moment a divorce is finalized, the spouse is no longer eligible for any benefits previously afforded to him.


Initially, life insurance companies rarely insist on proof of identity when Dependents are included on life insurance applications, or added to existing policies. However, in the event that a claim is actually filed, the carrier will definitely demand that proof of identity is provided before any proceeds are distributed.


Location has no bearing on the eligibility or qualification status of a Dependent. Regardless of whether or not a person’s children live at the same address or across the country, they will still be considered qualified Dependents if they are minors.

The same truth applies to a person’s spouse; whether or not the married couple actually lives together is irrelevant for life insurance purposes.


Understanding the basic definition of a Dependent with respect to life insurance policies can help a policy owner, or prospective policy purchaser, make the best decisions possible. When examining the available policy riders to protect Dependents and comparing them to the costs and benefits of individual policies for those people, the duration of the riders based on contract definitions will play a major role in the decision making process.

Additionally, knowing the definition of Dependent can also help a policy owner to properly plan for the expiration of a family member’s insurance benefits to minimize or eliminate any gaps in protection.

This article is a Twisted Nonsense Exclusive! (09/10/2009)

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