Life is uncertain, and as we journey through life, the need to prioritise the safety net for our loved ones becomes significant. This is where term insurance steps in, which ensures the financial security of one’s family in the event of an unfortunate event. Along with the safety net, term insurance also offers the option to add rider benefits. These riders provide additional coverage and customisation to your policy, making it even more comprehensive. One such rider is the Waiver of Premium Rider. Let’s embark on a deep dive into the world of this rider.
Understanding the Basics
If you are wondering what is life insurance, it’s a contract between a life insurance company and a policyholder. Term insurance is a life insurance product, which provides financial coverage to the policyholder for a specific period. Riders to your term insurance policy help in getting additional cover for contingencies that add benefits to the policy.
Waiver of Premium Rider
Imagine this scenario: You have bought a term insurance plan to protect your dear ones from monetary worry in case of your untimely demise. You are paying the premiums regularly and enjoying the peace of mind that comes with having a life cover. But one day, you meet with an accident that leaves you disabled and unable to work. How will you continue to pay the premiums for your term plan? What will happen to your policy if you default on the payments? Will your family still get the benefits if something happens to you?
That is where a waiver of premium rider can come to your rescue. A waiver of premium cover is an optional add-on feature that you can buy to supplement your term insurance plan when buying it. This rider waives off all the future premiums of your term plan if you turn into a totally and permanently disabled person because of an accident or a critical illness. This way, your policy remains active, and your family gets the full sum assured in case of your death.
How Does a Waiver of Premium Rider Work?
A waiver of premium rider works in two scenarios:
- You turn into totally and permanently disabled due to an accident for a minimum period of six months. The disability should be such that it prevents you from performing any occupation or earning any income.
- You are diagnosed with any of the specified critical illnesses during the policy term. The critical illnesses may vary from insurer to insurer, but some common ones are cancer, heart attack, stroke, kidney failure, etc.
In either case, you must inform the insurer about your condition and submit the required documents and proofs. The insurer will verify your claim and, if approved, waive off all the future premiums of your term plan from the date of disability or diagnosis. You do not have to pay any premium until the end of the policy term or until your recovery, whichever is earlier. Your life insurance policy will continue providing you with the life cover per the original terms and conditions.
What are the Benefits of a Waiver of Premium Rider?
A waiver of premium rider offers several benefits to you and your family, such as:
- It assures that your term plan is not terminated due to non-payment of premiums in the event of a physical disability or a severe illness. This way, you do not lose the life cover you bought for your family’s security.
- It saves you from the financial stress of paying premiums when you cannot work or earn an income due to a disability or a critical illness. You can concentrate on your recovery and well-being without stressing about the premiums.
- It provides continuity of coverage for your family in case of your death during the policy term. Your dear ones will get the full sum assured as per the policy without any deduction or reduction.
- It enhances the value of your term plan by boosting an additional layer of protection at a nominal cost. The premium for a waiver of premium rider is usually a small percentage of the base premium of the term plan.
How to Buy a Waiver of Premium Rider?
You may purchase this rider along with your term insurance plan at the time of policy inception. You have to pay an additional premium for this rider over and above the base premium of the term plan. This rider’s premium depends on factors such as age, health, occupation, sum assured, policy term, etc.
You can compare different term insurance plans with the waiver of premium rider online and go for the one that fits your needs and pocket. You can also use online calculators and tools to estimate the premium for this rider and its impact on your overall coverage.
A waiver of premium rider is a valuable feature that can enhance your term insurance plan and provide you with more security and peace of mind. It can help you ward off the risk of losing your life cover due to non-payment of premiums because of a disability or a critical illness. It can also save you from the financial strain of paying premiums when you cannot work or earn an income. It can ensure continuity of coverage for your family in case of your death during the policy term.
If you are looking for a term insurance plan offering comprehensive protection for your family’s future, consider adding a waiver of premium rider. It is an intelligent way to secure your family’s future in case of any unforeseen event that affects your income-earning ability.