Glossary

Dependent coverage

Life insurance on a spouse, domestic partner or children, added through an employer plan or a rider, that pays the employee if a covered dependent dies.

Also called: dependent life insurance, spouse and child life insurance

Dependent coverage is life insurance on members of an employee's or policyholder's family. It is most common as an option in employer group plans, which may offer a fixed amount for each child and a larger amount for a spouse, often capped at a share of the employee's own coverage. Individual policies can provide similar protection through spouse or child term riders. In nearly all cases the employee or policy owner is the beneficiary.

Spousal amounts above a set threshold usually require evidence of insurability, and child coverage typically ends at an age set by the plan, often later for full-time students. Hypothetical example: an employer plan lets a worker buy $50,000 on her spouse and $10,000 per child for a few dollars a month, but if she elects more than $30,000 of spouse coverage after her initial enrollment, her spouse must answer health questions.

Small amounts get favorable tax treatment: according to IRS Publication 15-B, employer-provided group-term coverage on a spouse or dependent with a face amount of $2,000 or less is a tax-free de minimis benefit. Dependent coverage usually ends when you leave the job, though conversion may be available. It can cover funeral costs cheaply, but a stay-at-home spouse's economic value often justifies a separate individual policy. See dependent life insurance through an employer and life insurance for stay-at-home parents.

Last reviewed October 4, 2026

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Related terms

Group life insurance Coverage issued under one master contract to members of a group, usually employees, often at one or two times salary with little or no underwriting. Voluntary life insurance Group life coverage offered through an employer that employees choose to buy and pay for themselves, usually by payroll deduction. Rider An optional provision attached to a life insurance policy that adds, limits or changes benefits, usually for an extra charge. Evidence of insurability Health and other information an insurer requires to approve coverage, such as medical questions, records or an exam, often for amounts above guaranteed issue. Imputed income The taxable value the IRS assigns to employer-paid group-term life insurance above $50,000, added to your W-2 wages though you receive no cash.

Related guides

Dependent life insurance through an employer Employer dependent life covers a spouse and children in small amounts for a low price. What it pays, how the $2,000 tax rule works, and its limits. Federal Employees' Group Life Insurance (FEGLI): Basic, A, B and C How FEGLI works for federal employees and retirees: coverage amounts, OPM premium rates, the Extra Benefit, retirement reductions, beneficiaries and claims. Life insurance for stay-at-home parents A stay-at-home parent earns no paycheck but would be costly to replace. How to price childcare and household work, pick a term and get approved. Spouse and family riders on life insurance: how they work Spouse, children and family riders add term coverage for a partner and kids to one policy. Conversion rights, limits, and when separate policies are better.