What is Waiver of Premium?
The Waiver of Premium is a rider added to life insurance policies, providing a safety net for policyholders in case they experience a significant disability or illness. If the insured becomes unable to work due to a covered disability or condition, this rider enables them to continue receiving coverage without the need to pay premiums.
This benefit typically requires the policyholder to be disabled for a specific period, often six months, before the waiver takes effect. Once eligible, the insurance company covers the premium payments for the duration of the disability, ensuring the policy remains active without financial strain on the insured.
In addition to life insurance, the Waiver of Premium rider can often be added to term life and final expense insurance policies. This feature is especially beneficial for individuals in high-risk occupations or those with health conditions that might increase the likelihood of future disability. It ensures that even if an unexpected health issue arises, the policyholder’s beneficiaries remain protected without interruption.
For example, if a construction worker with a term life policy and this rider suffers an accident and can’t work, the Waiver of Premium can keep their policy active while they recover. This provision allows individuals to focus on their recovery without worrying about their insurance coverage lapsing.