How Can Waiver Of Premium Rider Be Beneficial?
Published On Nov 28, 2021 11:00 AM By InsuranceDekho
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Riders are optional, supplementary terms that are priced separately and apply to an individual's existing insurance policy. Basically, a rider is an addition to an existing insurance policy that provides additional coverage and risk protection. Insurance riders are low-cost add-ons that may be purchased in addition to a person's life insurance policy. They boost and extend an individual's insurance policy to cover more than just the cost of dying.
Under waiver of premium rider, in unforeseen events like dismemberment, disability, or serious illness as a consequence of an accident, sickness, or other cause. This rider gives a waiver on all future insurance premiums to the respective individual. Apart from that, the insured individual’s family continues to benefit from the policy's basic benefits, which may include bonuses, guaranteed income streams, or fund value growth, depending on the policy's kind. To find out more on waiver of premium rider, read on.
Benefits Of A Waiver Of Premium Rider
Following are some of the benefits that a waiver of premium rider -
Must Read: Why Should You Buy Income Benefit Rider?
1. Prevention Of Policy Lapse
The main advantage of including a waiver of premium benefit rider in an insured individual’s life insurance policy is that it protects the policy from lapse due to non-payment of premiums. It's crucial to understand that an individual can't submit a claim on an expired life insurance policy. As a result, despite not paying the set premium instalments, this add-on function keeps their respective policy valid.
2. Policy Continuation After Death
The majority of life insurance plans expire if an insured individual dies within the policy's term. In this case, the respective insured individual’s nominee receives the preset death benefit. If an insured individual adds the waiver of premium rider to their life insurance policy, it will continue to pay out until the end of the policy's term, even if one of the following events occurs.
- The insured individual’s death and the subsequent payment of the death benefit to their nominee.
- The advent of a total or permanent disability that prohibits an insured individual from continuing to pay the policy's premiums on time.
As a result, it's always a good idea to include a waiver of premium rider in an insured individual’s life insurance policy.
3. Protection Of An Individual’s Financial Goals
A lifelong disability may throw an individual’s life into full chaos, causing them to fall behind on their respective financial commitments and abandon their financial ambitions. A family may be forced to deal with severe financial pressure as a result of the aforementioned circumstance, in addition to significant medical expenses and mental stress. A waiver of premium benefit allows an insured individual to keep their insurance coverage active even if they are unable to pay any further premiums.
As a result, the financial objectives for which an insured individual bought the coverage remains unaffected. For example, if they opt for waiver of premium insurance if they had invested in the concerned policy to build up a substantial corpus for their child's educational experience, wedding expenses, or planning for their post-retirement plan, those financial goals can be preserved even if they suffer a permanent disability.
4. Financial Security Of An Individual’s Family
An individual’s family's financial stability might be compromised if their life insurance policy lapses due to non-payment of premiums. In this case, the waiver of premium life insurance rider allows an individual to protect their family's financial future even if they are unable to pay additional premium contributions to their life insurance policy. It's also worth mentioning that an individual may get a waiver of premium rider for critical illness to protect themselves from not being able to pay their premiums after being diagnosed with a critical illness.
It's always a good idea to add a waiver of premium rider to an individual’s life insurance policy because of the many benefits it provides. This feature, in addition to providing life insurance, makes an insured individual’s policy more comprehensive and helps them protect their family's finances in the case of a permanent disability or serious illness.
Also Read: Exploring Hospicash Rider In Term 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.