Which statement about children's term riders on life insurance policies is NOT true?

The statement that a children's term rider can be issued for a specified percentage of the primary insured parent's base policy is not true because children's term riders typically provide coverage with a flat dollar amount rather than a percentage of the primary insured's policy. These riders are designed to provide a specific amount of insurance for children, which is usually a modest sum that parents can afford. This amount is set when the rider is added to the parent’s policy and is not dependent on the value of the parent's base policy.

While the other statements individually describe valid features of children's term riders—such as the existence of a modest amount of coverage and that these riders are issued for a specified amount—they do not accurately reflect how coverage is structured in relation to the parent's policy. The assumption that the coverage is based on a percentage of the parent’s policy is misleading, as this is not a standard practice in the insurance industry regarding children's term riders.

Understanding the structure and rationale behind children's term riders is essential for parents considering additional life insurance options for their children.