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What Are The Advantages Of A Premium Rider Waiver?

Published On Mar 28, 2022 10:00 AM By InsuranceDekho

The Waiver of Premium Rider is a one-of-a-kind rider that waives all future premium payments if the life assured becomes physically disabled. A waiver of premium ensures that the insurance will continue to operate if a policyholder is unable to pay their premiums. Waiver of premium rider can assist the life assured in ensuring financial stability for their family in the event that the life assured suffers total and permanent disability as a result of an accident, rendering them unable to support their family, or if the life assured is diagnosed with a critical illness during the policy term.

Waiver Of Premium Rider

Premium Rider Waiver is one of the most well-known riders. This rider waives all future premium payments for the term insurance policy if the policyholder becomes physically incapacitated. The waiver of premium rider is a valuable rider that ensures that the policy remains operational even if the policyholder fails to pay the payments. The rider can be applied in two scenarios. One, if the policyholder has been totally or permanently disabled as a result of an accident for at least 6 months. Second, if the policyholder is diagnosed with one of the catastrophic conditions listed above.

The main advantage of the Waiver of Premium rider is that it does not deprive the policyholder's family of benefits if premium is not paid. In addition, the policyholder's family can manage their finances without feeling overburdened as a result of the accident. The Waiver of Premium Rider is available at the start of the policy. In addition, the rider's claim can only be made once. If the base insurance is canceled, all benefits are paid under rider coverage, or the policyholder reaches the age of 65, the rider will be canceled. According to the Income Tax Act of 1961, the rider is entitled to tax benefits.

Importance Of Adding Waiver Of Premium Rider

1. Protection Against Uncertainties of Life

The premium rider waiver protects the life assured and his or her loved ones from the financial risks of life. All future premiums will be waived if the life assured dies in an accident during the policy term. All future payable premiums will be waived if the life assured is diagnosed with a critical illness. This rider provides financial protection against life's uncertainties, such as the early death of the life assured, both naturally and accidentally, accidental total and permanent incapacity, or critical illness diagnosis. 

2. Policy Continuance

The continuation of the policy is ensured by the waiver of the premium rider, even if the life assured goes away. If the life assured dies, suffers an accidental total and permanent disability, or is diagnosed with a serious disease during the policy term, the waiver of premium rider will waive all future payable premiums. The insurance company will pay all future premiums on the life insured's behalf and keep the policy active, allowing the nominee to take advantage of the policy's benefits. The cancellation of the premium rider secures the policy's continuation.

3. Affordable Premium Rates

To improve the policy's coverage, a waiver of premium rider can be applied at the time of policy issuance in exchange for an additional premium. The waiver of premiums has a low price, and it extends the power of coverage of the base insurance at a low cost.

4. Eliminates the Need of Additional Insurance Policy

As previously said, the waiver of premium rider gives life assurance and financial protection from life's uncertainties, obviating the need for an additional policy. This rider ensures that the policy is maintained long after the life assured has died, as well as providing cash aid in tough times. When this rider alone can obviate the requirement for a further policy, life assurance may not require an extra policy to protect the financial security of his or her family.

Take Away

A waiver of premium rider is a condition in an insurance policy that exempts the policyholder from paying premiums if he or she becomes critically ill, seriously injured, or physically disabled. Other requirements, such as meeting certain health and age requirements, may apply.

Also read - How Much Income Would You Require After Retirement?

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.

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