Your Guide To Waiver Of Premium Riders in Life Insurance

By | July 14, 2016

Waiver of rider

What will happen in case you find that you are unable to pay the premium on your Life Insurance policy? Worried that your policy will lapse? Let’s tell you how you can avoid losing your Life Insurance policy for non-payment of your premium.

What can you do if you cannot pay your Life Insurance premium?

This is where you can choose to have a Waiver of Premium rider attached to your Life Insurance policy. This rider exempts you from paying the premium if you are unable to work or earn an income due to a permanent or temporary disability, or if you fall seriously ill.

In this scenario, your insurance will cover you like it is meant to.

How does a Waiver of Premium rider work?

A Waiver of Premium rider added to your Life Insurance policy will give you a temporary or permanent exemption from paying the insurance premium because the policy holder is incapacitated and not able to earn an income.

Is a Waiver of Premium rider included in a policy by default?

The Waiver of Premium rider is an optional addition to a Life Insurance policy. The policy holder is required to pay a one-time fee to include the rider in the policy.

How can a policyholder qualify for a Waiver of Premium rider to be enforced?

A Waiver of Premium rider can be enforced on a Life Insurance policy if the insured person is seriously injured in an accident resulting in temporary or permanent disability, and the insured is unable to financially provide for themselves.

This rider can also be claimed if the insured person is diagnosed with a serious illness that requires an extended period of hospitalisation.

Additional Reading: All About Disability Income Riders

Important factors to remember about Waiver of Premium riders

Here are a few factors to consider when opting for a Waiver of Premium rider on a Life Insurance policy.

  • The rider must be added at the commencement of the insurance policy

The Waiver of Premium rider must be included in the Life Insurance policy at the time when the policy is being issued to the insured person. This would mean a slightly higher premium, but precaution never hurt anybody, right? In the unfortunate event that any form of physical or mental disability affects the policyholder, the insured person will be protected by this rider.

  • The disability should happen after the insurance policy is issued

If someone is already disabled, they cannot choose to take a Life Insurance policy with a Waiver of Premium rider. For a Waiver of Premium rider to be valid, the disability should occur after the issuance of the Life Insurance policy.

Some insurance policies have certain restrictions about how long a policy must be held before a Waiver of Premium rider can be claimed. This period is usually a year.

  • Claims will be approved at the discretion of the insurance provider

Not all claims for Waiver of Premium will be unconditionally accepted. Insurance companies have certain parameters which need to be met before claims are granted. This may vary on a case-to-case basis. It helps to have a chat with your insurance provider and get a clear idea of what factors decide claims approval.

  • A disability must occur before the age of 65 years for the Waiver of Premium rider to be claimed

If you ever need to claim the Waiver of Premium rider, remember that the disability that you are claiming the benefit for should have occurred before you (the insured person) attain the age of 65 years.

If an insured person becomes disabled after the age of 65 years, such disability is less likely to affect their earning capacity. Many insurance providers may cap this maximum age at 60 years.

What are the documents required to file claims?

If an insured person ever finds the need to make a claim on their Waiver of Premium rider, they should contact the Life Insurance company to intimate them about the disability.

Here is a list of the documents a policy holder will require when making a claim:

  • An attested doctor’s statement confirming that the insured person has suffered a disability. This letter should mention the area of disability.
  • The Waiver of Premium rider claim form that is given to the policyholder by the insurance company. This claim form should be signed by the insured person to convey that they want to enforce the rider.
  • The claim form could be accompanied by a written request from the insured person to enforce the rider.

When you consider getting a Life Insurance policy with a Waiver of Premium rider, you must be sure to understand all the terms of the rider as well as the various inclusions and exclusions.

Additional Reading: Benefits Of A Waiver of Premium Rider

More questions about Life Insurance?

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About Dheeraj Kapoor

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