How The Waiver Of Premium Rider Works
The waiver of premium rider may be included in any life insurance policy you choose to purchase. It simply states that in the event you become disabled while you own your policy…as long as you are disabled for a minimum of 6 months…the life insurance company will waive your premiums for as long as your disability continues.
It does not matter how long you are disabled…you will not be required to pay the premiums. Upon recovery you pick up your payments again. You will owe no debt to the insurance company. The cost of the waiver of premium rider is minimal.
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The premiums of your life insurance policy will be waived if you are continuously disabled for a minimum of six months and this must begin before a certain age. This varies between companies. It could be age 55 or age 60.
The minimum period may also vary. With each life insurance company the waiting period for your premium waiver may differ. Some start after 3 months, some 4 months, and most others after 6 months. The company will refund the premiums paid during the waiting period.
One of the most important things to bear in mind as far as the definition of disability is concerned is that it must clearly indicate that you are disabled and your premiums will be waived if you are unable to engage in the occupation in which you were employed at the time you became disabled.
It pains me to see that many large life insurance companies are still defining disability as not being able to engage in any occupation. With such a definition premiums will not be waived in many a case as this suggests that you may be qualified to do any job other than one you are experienced and trained to do. Be careful about this…take time to read your policy.
- Presumptive Disability
For the purposes of the waiver of premium rider, in some life insurance companies a person is considered disabled even though s/he can still work under certain circumstances. If this person has lost the use of both hands or both feet or both eyes he or she is considered disabled. The loss of one arm and one foot would also qualify that person…also included is the loss of hearing or speech.
- Proof Of Disability
Upon the onset of disability…before the premium waiver rider can take effect…proof of disability is required by the life insurance company. They may also require proof, on occasion, that your disability has continued. Failure to provide this information could result in the interruption of your premium waiver.
- Period Of Waiver
The waiver of premium rider allows for your premiums to be waived during your disability usually up to age 65. The benefit terminates when the policy terminates. If you have a 10 year term policy for example…the waiver of premium will only last up to the end of the 10 year period or to age 65, whichever is sooner.
The rider can be added to any life insurance policy whether whole life or term. Variable life, variable universal life and variable universal life can also have the waiver of premium rider added but only to the portion of premium that is applied to life insurance.
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