5 Reasons Why Waiver Of Premium Rider Is A Boon
Updated On Dec 17, 2021
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A rider is a form of insurance policy that adds to an existing policy's coverage and risk protection. Riders are supplementary terms that are charged individually and applied to an individual's current insurance policy. Insurance riders are low-cost additions to a person's existing life insurance policy. They are intended to supplement and broaden a person's insurance coverage to provide more than simply death benefits.
The premium rider is waived in the event of unforeseeable circumstances such as dismemberment, disability, or significant sickness as a consequence of an accident, disease, or other cause. Apart from the rider that exempts a person from future insurance premiums. The policy's main benefits, which may include bonuses, guaranteed income streams, or fund value growth, stand to profit the insured individual's family, depending on the policy's type. To know and understand more about waiver of premium rider, read on.
Reasons To Opt For Waiver Of Premium Rider
Following are few of the reasons for an individual to opt for waiver of premium rider -
Policy Lapse Prevention
The primary benefit of inserting a waiver of premium benefit rider in a life insurance policy for an insured individual is that it prevents the policy from lapse due to nonpayment of premiums. It's critical to recognise that a claim on a life insurance policy that has already expired cannot be filed. As a consequence, even if customers do not make the necessary monthly installments, this add-on function ensures that their insurance remains valid.
If the insured individual dies within the policy's term, the majority of life insurance policies will lapse. The predefined death benefit is paid to the applicable covered individual's nominee in this circumstance. If a waiver of premium rider is added to a life insurance policy, it will continue to pay until the term of the policy expires. As a consequence, it's always a good idea to include a premium waiver rider in a life insurance policy for an insured individual.
Protection Of Financial Goals
A physical condition may throw a person's life into complete disarray, forcing them to fall behind on expenses and give up on their financial goals. As a result, the affected family may experience major financial hardships, as well as significant medical expenses and mental anguish. A waiver of premium benefit allows a policyholder to preserve their coverage even if they are unable to make any further payments.
A physical ailment may wreak havoc on a person's life, forcing them to fall behind on their expenses and abandon their financial goals. As a result, the impacted family may experience serious financial hardships, as well as major medical costs and mental anguish. A waiver of premium benefit enables an insured individual to preserve their insurance coverage even if they are unable to make any further payments.
One of the most significant benefits is the tax reduction associated with a premium rider waiver. Section 80D of the Income Tax Act of 1961 allows a policyholder to claim a tax deduction of up to Rs 25,000 for the purchase of a health insurance policy or a health-based rider with a life insurance policy in this situation. Senior persons are also entitled for a Rs 50,000 tax deduction under Section 80D.
A waiver of premium rider is usually a good idea to include in a person's life insurance policy because of the numerous benefits it delivers. This feature makes an insured individual's policy more comprehensive and helps them secure their family's income in the event of a protracted incapacity or catastrophic disease, in addition to providing life insurance.
How Riders Help In Customizing Life Insurance
Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.