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What is Dependent Life Insurance?

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.

What is a dependent life insurance policy?

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

Who can qualify as life insurance dependents?

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

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

Dependents of military members

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.

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Pros and cons of dependent life insurance

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

  • Can provide financial protection for end-of-life expenses: Dependent life insurance can help you cover the dependent's end-of-life expenses, helping to relieve financial stress during grieving.

  • Tend to be cost-effective: These policies tend to be more cost-conscious since they come in smaller amounts and are often available through group policies.

  • Convenient to manage: Dependent life policies may be easier to obtain and maintain since they’re often available through employers.

  • No medical exam: Dependent life insurance seldom requires a medical exam, possibly making the application process faster without the inconvenience of an exam.

Here are some drawbacks of dependent life insurance:

  • Limited coverage: Dependent life insurance tends to have small death benefits to cover final expenses. Therefore, this type of policy may not work well for replacing substantial income.

  • Limited accessibility: These policies tend to be offered as part of workplace benefits plans. Therefore, it may be hard to customize coverage to your needs or apply for coverage at all if you’re self-employed or unemployed.

  • May lose coverage if you leave your job: Since most of these policies are available through work, you may lose coverage if you change jobs or retire.

Is the dependent life insurance death benefit taxable?

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.

Learn more about life insurance

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.

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