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What are Premium Waiver Rider Benefits?

Published On Jul 19, 2021

The regular payment of the premium amount is one of the main reasons that keep the term insurance policy contract valid and active between the policyholder and the insurance company. In a traditional life insurance policy, the sum assured or death benefit is paid to the nominee upon the policyholder's death during the policy period, and the policy is terminated. This isn't always the case, though. In some life insurance policies, if the policyholder becomes disabled and cannot pay his/her premiums or dies before the policy term, the policy is not cancelled; instead, the insurance company extends the policy by paying the premium. Here, the rider benefit of 'waiver of premium' helps ensure that the policy does not become invalid if the life assured is seriously injured or diagnosed with a critical illness and cannot pay the premium instalments. 

How Does The Rider Benefit Work?

The rider benefit waives off the future premium payment obligations of the life assured if he/she is in a state of disability for a minimum of 6 months or when he/she is diagnosed with a critical illness like cancer, heart disease, kidney failure etc. Moreover, the plan has a waiting period of about 90 days, i.e., if the life assured has become disabled or is diagnosed with a critical illness within the 90 days of policy inception, he/she can avail the rider benefits. 

Who All are Eligible for the Rider?

The rider can be bought by any individual with a term insurance policy and between the age range of 18-65 years. Furthermore, it must be noted that the rider can be bought only during the policy inception and can not be removed. 

How to Avail the Rider Benefit?

The life assured has to submit certain documents to avail the waiver of premium rider benefit. These include a copy of original term insurance policy documents, claim request form, address and ID proof of the life assured, medical reports and records confirming the health condition and a disability certificate from a legitimate government body in case of a disability. 

What are the Rider Exclusions?

There are certain cases under which the life assured will not be able to avail the rider benefits. These include the situations when the serious injury or disability is caused due to war, riots, strikes, criminal activity, nuclear contamination, adventurous sports like bungee jumping, hiking, scuba diving, paragliding etc. Moreover, critical illnesses like HIV, congenital infection and any disease diagnosed during the waiting period will not be covered under the waiver of premium rider benefit option. 

Take Away

The rider benefit can help ensure the continuation of your term insurance policy and all the benefits even if you become incapable of paying the premium instalments. This will help provide some financial relief and security for your family. 

Also read - Benefits of Term Insurance That You Should Know

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