Waiver of Premium Rider
Waiver of Premium Rider is one of an optional additional coverage which is popularly opted along an insurance policy. Waiver of premium rider is a very unique rider, this rider waives off all the future payable premiums in case the life assured becomes physically disable. Waiver of premium ensures policy continuance in case the policyholder is not able to make premium payments. Waiver of premium rider can help the life assured ensure financial stability of their family incase the life assured suffers total and permanent disability caused during an accident making the life assured unable to make a living for their family or in case the life assured gets diagnosed with a critical illness during the policy tenure.
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What is the Waiver of Premium Rider?
The Waiver of Premium rider is one of the popular riders. Under this rider, all future payable premiums for the term insurance policy are waived off if the policyholder becomes physically disable. The waiver of premium rider is a highly useful rider that makes sure the policy remains active even if the policyholder does not pay premiums.
The rider works in two scenarios. One, if the policyholder has been suffering from a total or permanent disability caused due to an accident for a minimum of 6 months. Secondly, if the policyholder gets diagnosed with any of the critical illnesses.
The prime benefit of the Waiver of Premium rider is that it does not deprive the policyholder’s family of the policy benefits even if premium is not being received. Moreover, the policyholder’s family is able to manage finances without feeling overburdened due to the mishap.
The Waiver of Premium Rider can be purchased at the time of policy inception. Furthermore, the claim under the rider can be triggered only once. The rider gets terminated if the base policy terminates, all benefits are paid under rider coverage, or the policyholder attains the age of 65 years.
When it comes to tax benefits, the rider is eligible for tax benefits as per the Income Tax Act, 1961.
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Eligibility Criteria of Waiver of Premium Rider
The eligibility criteria is as follows:
Eligibility Criteria for Waiver of Premium Rider
Minimum Entry Age
Maximum Entry Age
Maximum Maturity Age
Minimum - Same as base policy’s sum assured
Maximum - No Limit (depending on the life insurance policy)
Coverage Time Period
Same as life insurance policy term
Premium Payment Term
Same as life insurance policy term
Premium Payment Mode
Same as premium payment mode of the base policy
Documents Required for Waiver of Premium Rider Claims
For a successful claim of Waiver of Premium Rider, the below-mentioned documents are required:
- Original Policy Document
- Filled Claim Form
- Policyholder’s Photo ID Proof
- Policyholder’s Address Proof
- Medical Reports (for Critical Illness)
- Copy of policyholder’s bank statement/cancelled cheque
- Disability Certificate from local government body
Waiver of Premium Rider Exclusions
Some of the exclusions under Waiver of Premium rider are:
- Suicide of self-inflected injuries
- Congenital Infection
- Alcohol or substance abuse
- Pre-existing medical condition
- Radioactive contamination due to nuclear accident
- War, civil commotion, breach of law, or willful participation in violent acts
Importance of Adding Waiver of Premium Rider
Waiver of premium rider can be a good addition to your term insurance policy as it can provide additional financial protection to the life assured. Below mentioned are reason why it is important of adding waiver of premium rider to your term insurance policy:
1. Protection Against Uncertainties of Life: Waiver of premium rider provides financial protection to life assured and his/her loved ones from the uncertainties of life. In case the life assured passes away during an accident anytime within the policy term, all future payable premiums shall be waived off. In case the life assured is diagnosed with a critical illness, all future payable premiums shall be waived off. This rider provides financial protection from the uncertainties of life such as an untimely demise of the life assured naturally and accidental, accidental total and permanent disability, or diagnoses of a critical illness.
2. Policy Continuance: Waiver of premium rider ensures policy continuance even after the life assured passes away. Under the waiver of premium rider, all future payable premiums shall be waived off in case the life assured passes away, life assured suffers accidental total and permanent disability or diagnoses of a critical illness within the policy tenure. The insurance company shall pay all future payable premiums on the behalf of the life assured and keeps the policy active, letting the nominee avail the benefits under the policy. Waiver of premium rider ensures policy continuance.
3. Affordable Premium Rates: Waiver of premium rider can be added to the policy at the time of policy issuance with an exchange of additional premium, to enhance the coverage of the policy. The premium of the waiver of premiums is nominal, this rider increases the power of coverage of the base policy at an affordable cost.
4. Tax Benefits: The life assured can avail tax benefit by adding waiver of premium rider to your term insurance policy. Premium paid towards riders are eligible for tax exemptions. The life assured can avail tax exemptions under Section 80C of the Income Tax Act, 1961. The tax exemption allowed for riders are eligible upto Rs 1.5 Lakhs under Section 80C of the Income Tax Act, 1961.
5. Eliminates the Need of Additional Insurance Policy: Waiver of premium rider as mentioned earlier provides the life assured, financial security from the uncertainties of life, which results in elimination of requirement of an additional policy. This rider ensures policy continuance even after the demise of the life assured and provides financial assistance in difficult times. Life assured may not require an additional policy to ensure financial security of his/her family when this rider alone can eliminate the need of an additional policy.
Term Insurance Companies
- ICICI Prudential
- Aditya Birla
- PNB MetLife
- Bharti AXA
- Edelweiss Tokio
- Bajaj Allianz
- Canara HSBC OBC
- Tata AIA
- Future Generali
- Reliance Nippon
- Star Union Dai-ichi
- Ageas Federal
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