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How Can I Benefit From The Waiver of Premium Riders?

Published On Aug 16, 2021

Adding riders to your life insurance policy allows you to tailor your coverage and increase the financial safety net provided to your loved ones. A waiver of premium rider prevents your life insurance coverage from lapse if you become disabled and are unable to pay the payments on your policy.

What is A Waiver for a Premium Rider?

You won't have to pay your premiums if you have a waiver of premium rider because they are waived for the duration of your incapacity. However, the rider is frequently difficult to obtain and provides less cash support than a disability policy. Instead of a waiver of premium rider, most people should purchase disability insurance to protect their income.
The Waiver of Premium Rider enables the policyholder to request a waiver of future premiums to be paid by the policyholder in the event of the stated event, such as the death of the life insured, disability, dismemberment, and so on. So, if you are unable to earn income to pay the premiums on your life insurance policy due to specific predetermined causes, you can use the Waiver of Premium Rider benefit. The rider is available with many other types of policies, including child plans, disability plans, unit linked plans, and so on.

Highlights of The Rider

The Waiver of Premium Rider is a very essential rider that comes with numerous benefits. Here's a quick rundown of the rider's highlights:

  • This rider provides additional coverage to your life insurance policy.
  • A premium waiver rider covers your coverage premiums if you become disabled.
  • To activate the rider, you must meet your insurer's disability requirements.
  • A standalone disability insurance policy provides more coverage and is easier to qualify for than a premium waiver rider.

Terms and Conditions of The Rider

There are some limits and conditions to gain the benefit of the Waiver of Premium Rider (such as those specified following), and they vary from business to company – and double the details prior to actually taking use of the Waiver of Premium Rider.

  • The incapacity should last at least 6 months, and the policyholder should never be able to work owing to his condition.
  • The disability benefit may not be available during the first six months of the coverage.
  • The handicap should have occurred as a result of an accident.
  • The critical illnesses should be included on the company's list.
  • The impairment should not have occurred as a result of involvement in dangerous athletic events (such as life skydiving), or during any illegal action, attempted suicide, or war.

How Does This Rider Work?

The waiver of premium rider lets you avoid paying premiums if you become disabled and are unable to work for six months or longer. It is not possible to add the waiver to an existing insurance, and it does not cover pre-existing conditions. You must file a disability claim with your insurer in order to activate the rider. 

During the waiting period, which is the time between your injury and the start of your rider benefits, you must pay your premiums. If you qualify for the waiver, you will be reimbursed for any premiums paid during the term. Your premiums are paid for the duration of your disability, up to a specific age (usually age 65). When your disability expires and you are able to work again, you resume making payments.

Take Away

The Premium Rider Waiver is extremely advantageous for people whose offspring and perhaps other family members rely on them and their money. And for those who want their aspirations to come true at whatever cost. This rider is offered for a small additional fee and is occasionally included in the policy. This is a critical characteristic since it secures the child's future regardless of whether the parent survives to the end or not. It also gives the parent some piece of mind.

Also read - All you need to know about accidental death rider in term insurance

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