The waiver of premium rider is a very helpful life insurance rider. You get the waiver of premium rider benefit when you buy this add-on cover along with a life plan. But you need to know what is a waiver of premium, and how does it work? Take a look at this article to know more.
What is Waiver of Premium?
The waiver of premium rider benefit is a type of extra cover that you can get along with your life insurance plan by paying an additional premium. There are multiple types of life insurance plans which has this rider, mainly the child plans.
How does the Waiver of Premium Rider work?:
If the policyholder dies during the policy tenure or cannot pay the due premiums on time, this rider gets triggered, and all future premiums are automatically waived off.
For example, in a child insurance plan, a policy had been taken by a parent for a child. If the parent, i.e. the policyholder, dies, but the child, i.e. the insured, is still alive, this rider benefit is triggered. In this case, all future premiums are waived off, but the plan continues as per schedule. The maturity benefit is paid out according to the schedule when the plan matures, and the policy is terminated.
Features of the Waiver of Premium Rider:
Here are the features of this rider helpful for life insurance:
- Available when a policyholder is unable to earn: The waiver of premium rider comes into action when the policyholder cannot earn a livelihood and pay the insurance premium due to a severe illness or injury. Often, disability resulting from an accident can help you get the claim from the waiver of premium benefit rider. Also, a critical illness like cancer or stroke can prevent you from working and make you unemployed. At such a time, the usefulness of a waiver of premium rider comes through. Your life insurance cover stays active even while you do not pay the premiums anymore.
- Available After Payment of Premium for Fixed Number of Years: At times, certain types of life insurance plans, such as the whole life insurance plans, offer a waiver of premium if you have paid the premium regularly for a fixed number of years. Usually, after you regularly pay the life insurance premium for twenty or thirty (or any pre-decided number of) years, all future premiums are waived off, provided you have the waiver of premium rider in place.
- Can be availed on child plans: The waiver of premium can be availed in the child life insurance plans. If the policyholder, i.e. usually the parent, dies within the policy period, the policy doesn't terminate. The insurance provider takes over the premium payment responsibility, so it is waived off for the beneficiary, but the plan continues to be in force. Check with your insurance provider when buying a child plan. If, for some reason, this cover isn't in-built, look to get it as an add-on cover.
- There is a short waiting period clause: There is usually a short waiting period clause associated with the waiver of premium rider. You need to submit the proper medical documents to prove you cannot earn your livelihood and subsequently pay the insurance premium. This is generally around six months. The insurance company waits for six months, and if you are still unable to pay the premium, the waiver of premium rider gets initiated.
- Should be purchased when buying the plan: Now that you know what waiver of premium is and how it can help you, you should also be aware that this add-on cover needs to be purchased when buying the life insurance plan. You need to get the rider attached to your policy when you buy it in the first place. You can get the waiver of premium rider online when you buy life insurance online too.
As you can see, you get many benefits when you opt for the waiver of the premium rider along with your chosen life insurance plan.
Steps to buy the Waiver of Premium Rider:
There are some elementary steps that you can follow to purchase this add-on cover. All you have to do is:
- Compare: Start by comparing the different life insurance plans that have the waiver of premium rider available with them. Choose a suitable cover at a reasonable price.
- Buy your life cover: Buy the cover by filling up the application form and paying the life insurance premium. This step can safely and quickly be done online.
- Buy the rider: After that, get the waiver of premium rider attached to the base life insurance policy to enjoy all the benefits that bring add on coverage.
The rider will be included in your plan as per the ask and need so that the future premiums will be inclusive of the rider premium as well. Hence, you do not have to worry about paying the premium for this rider separately.
Keeping all the points mentioned above in mind, you can understand just how beneficial the waiver of premium rider is. Consider getting this rider when you buy the life insurance plan. Your premium will go up, but you will get a substantial hike in the overall coverage too. Life is unpredictable, and you cannot say what problems may crop up later on. This is why you should try to get the waiver of premium rider and secure your financial future in the best possible manner.
- Are the waiver of premium rider benefits available on all types of life insurance plans?
No, it is not available with every single type of life insurance. It is commonly found with life insurance, such as whole life insurance and term life insurance.
- Is the waiver of premium rider expensive?
Like all life insurance riders, the waiver of premium also is relatively inexpensive. However, you will have to pay a marginally higher life insurance premium when this rider is attached to the base policy.
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