Waiver of Premium Rider in Life Insurance

What is a Waiver of Premium Rider?

How Does a Waiver of Premium Rider Work?

What are the Benefits of Waiver of Premium Rider?

Some of the major benefits of waiver of premium rider are:

1. Uninterrupted Coverage

The foremost and primary benefit of a waiver of premium rider is that it ensures that your life insurance policy remains in effect even if you cannot pay the premiums due to a disability or illness. 

Thus, when you have multiple things to look after at a crucial stage of health, you don't have to be concerned about losing out on the financial protection you bought for your family. 

2. No Financial Burden

With the waiver of premium rider, you don't have to worry about paying the premiums during the period of disability. The rider ensures that your policy coverage continues without any financial burden.

3. Prevents Policy Lapse

By signing up for a life insurance policy, you have made a long-term financial commitment to protect your family's future. A waiver of premium rider helps protect this investment by ensuring that your policy does not lapse on grounds of non-payment of premium during a period of disability.

4. Peace of Mind

Often ignored, but a critical benefit is the peace of mind that this rider provides. Knowing that your life insurance coverage, i.e., your well-planned financial protection for your family, will continue, regardless of your ability to pay premiums, is a significant benefit. 

5. Cost-effective

This rider can be added to the base policy for a nominal cost. But the benefits that it provides are nonpareil. It is a cost-effective way to ensure that your financial 'coverage remains in force, even during a period of disability. Thus, a small cost can offer significant benefits in the long run.

What are the Disadvantages of Waiver of Premium Rider?

Exclusions Under Waiver of Premium Rider

Who Should Buy Waiver of Premium Rider?

Eligibility for Buying Waiver of Premium Rider

Documents Required to Claim Waiver of Premium Rider

Factors to Consider When Buying Waiver of Premium Rider

FAQs About Waiver of Premium Rider

Is there a waiting period to avail waiver of premium rider? 

Yes, after filing a claim, usually there is a waiting period of about 6 months during which the policyholder must be suffering from the condition mentioned in the claim. Post this waiting period only the waiver comes into effect.

What happens if the policyholder recovers from the disability or illness?

If the policyholder recovers from the disability or illness, they will need to resume paying the premiums as per the policy terms and conditions. 

Can a waiver of premium rider be used multiple times?

Yes. You can use this rider multiple times for different or recurring disabilities. However, it depends on the terms and conditions of the policy. 

Is waiver of premium available on term insurance?

Yes. Most term insurance plans provide the waiver of premium rider as an add on. 

Is the Waiver of Premium rider available for all life insurance policies?

Not all life insurance policies offer the Waiver of Premium rider; availability varies by insurer and policy. It is usually offered as an optional additional rider that can be added to your base policy for a nominal extra premium.  

Is the premium paid for the Waiver of Premium rider tax-deductible?

Premiums paid for the Waiver of Premium rider are eligible for tax benefits under section 80(C) of income tax, based on the prevailing income tax laws.

Can the Waiver of Premium rider be added to an existing life insurance policy?

The availability and the option to add a premium of waiver rider to your existing policy depends on the insurer and the insurance policy. Not all insurers provide the option of adding this rider to a running insurance policy.  

What happens if I cancel my Life Insurance policy with a Waiver of Premium Rider?

For a rider to be active, the base policy must be active. Thus, if you cancel your base life insurance policy, you will no longer be covered by the rider.  

How do I know if the Waiver of Premium Rider is right for me?

To determine if the Waiver of Premium Rider suits you, assess your financial situation and risk of losing income if any unfortunate circumstance happens.  

How does the Waiver of Premium Rider affect my Life Insurance coverage?

The Waiver of Premium Rider allows your life insurance coverage to continue without premium payments if you become disabled, without affecting the coverage amount.