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Insurance FAQ: What is a waiver of premium rider?

Dailybhaskar.com  
The author of the article, Deepak Yohannan, is CEO of MyInsuranceClub.com, a price and features comparison website for insurance products in India. For related queries, please write to him at deepak@myinsuranceclub.com

What Exactly is a Waiver of Premium Rider?
 
The primary objective of a life insurance policy is to provide cover for your family in case you were to lose your life. Providing cover, simply put, means giving enough money to the family so that their livelihood isn’t affected.

But what happens when you are injured and cannot earn to provide a livelihood for your family? What happens to the insurance policy’s outstanding premiums?

It often happens that due to an accident or illness the policyholder is left unemployed. At such a time having a rider that supports the insurance plan proves to be very helpful.

If you are wondering if there really is such a rider available, the answer is yes. The premium waiver rider keeps the policy in action when you are incapable of paying the premium amount owing to a physical disability. This is indeed a very useful rider and if you haven’t opted for it yet, read to know why you must do so now.

Features of the waiver of premium rider

• The rider will kick into action after the policyholder has been in a disabled condition for a minimum of 6 months. This however varies from insurer to insurer and in some companies the wait is just for 3 months. 
 
• The policyholder must be of age 55 (sometimes 60) or less to enjoy this benefit. 
 
• The premium will be waived till the policyholder is 65 years of age, or till the policy comes to an end, whichever is earlier. Of course, if he is healed and ready to earn again, the benefit will stop.

Advantages of the waiver of premium rider

The waiver of premium rider is an extremely useful rider as it allows the policyholder and his nominees to enjoy insurance cover even when he isn’t in a state to carry on with the policy. The premium is waived off even after the death of the policyholder. This proves to be advantageous for children (this rider was primarily designed for child plans) who suddenly lose earning parents.

With the help of this rider, the futures of the children remain secured even in the absence of the parents.

Points to remember

It is very important to understand the definition of “disable” here, as defined by the insurance companies. Any person who is unable to work due to the loss of one or both arms, limbs and eyes qualifies as disabled. If a person loses the sensation of hearing, he too shall be included in this category. The life insurance company needs a proof to establish that the policyholder is indeed disabled. At specific intervals, these evidences have to be produced to the company to show that the policyholder remains disabled. If the proofs are not submitted, the premium will not be waived and there may be a lapse of policy. 

Conclusion

In a world that is so susceptible to accidents and illnesses, it makes a lot of sense to opt for the waiver of premium rider. For a just a small amount of money, you can provide additional cover for your family. So go ahead and get the premium waiver rider today along with your life insurance policy. 
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