Waiver of Premium - Know Waiver of Premium Benefit

Written by : Knowledge Centre Team

2022-10-22

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A waiver of premium ensures you will still have life insurance coverage even if your earnings are reduced due to injury, disability, or critical illness. The rider is used mainly to cover life insurance costs in the event of critical illness or long-term disability. If you are affected, this rider will waive your insurance premiums for the duration of the rider period. Riders are offered at an additional cost, which is paid as part of the premium.

What is Waiver of Premium?

A waiver of premium rider is an insurance rider that allows you to stop making premium payments under certain circumstances, such as critical illness, injury, or disability. The insurer will continue to provide coverage, and the policy will not lapse.

How does Waiver of Premium Benefit Work?

When you buy a life insurance policy, you are usually required to pay premiums regularly to keep the coverage in force. A waiver of premium benefits allows you to stop making premium payments under certain circumstances and keep your coverage in force. Some of the features are listed below:

Most waiver of premium benefits is triggered by a disability that prevents you from working.
The benefit is designed to help keep your life insurance coverage in force if you become disabled and cannot work to earn income to pay the premiums.
Waiver of premium benefits are not available on all life insurance policies and the terms of the benefit can vary by insurer.
Some policies may have limitations on when the benefit can be used or how long it will last.
Some policies may define a waiting period that must pass before certain benefits such as waiver of premiums can take effect.

Benefits of Waiver of Premium in Term Insurance

Waiver of premium is a rider that is added to a life insurance policy. It allows the policyholder to stop paying premiums if they become disabled or down with critical illness and is unable to work. The waiver of the premium rider has several benefits.

1. Helps you keep your life insurance policy active:

It ensures that the policyholder will still have life insurance coverage even if they can no longer work and pay premiums. If you are the sole breadwinner of your family, your family will be financially dependent on your life insurance policy proceeds, in case of your unfortunate demise.

However, if you are unable to pay the premiums due to an accident or illness, your life insurance policy will lapse, and your family will not receive the death benefit. With a waiver of premium rider, your life insurance policy will remain active even if you are unable to pay the premiums. This will ensure that your family receives the death benefit in case of your untimely demise.

2. Gives you peace of mind:

Knowing that your life insurance policy will remain active even if you are unable to pay the premiums due to an accident or illness gives you peace of mind. You can rest assured that your family will be taken care of financially in case of your untimely demise.

3. Save money on premiums:

The waiver of premium rider can help you save money on premiums. If your income has been reduced due to illness, the money saved on premiums can be used to manage your expenses.

Exclusions in Waiver of Premium Rider

The most common exclusions under the waiver of premium rider are:

Suicide
Self-inflicted injuries
Congenital Infection
Alcohol or drug abuse
Pre-existing medical condition
Radioactive contamination
War
Civil unrest
Breach of law
Wilful participation in violent acts
Disability resulting from participation in any hazardous occupation, except where the policyholder has the permission of the insurer and has paid an additional premium if required
Disability resulting from participation in any hazardous sports or activities

Must Read - Disability Cover

How to Claim Waiver of Premium Benefit?

The policyholder must intimate the insurer within the first 30 days of diagnosis of any critical illness or disability. The documents mentioned below should be submitted along with the application in the requisite format:

Original Policy Document
Completed Claim Form
Photo IDs such as Aadhar or PAN Card
Proof of address such as Passport or Aadhar
Hospital reports
Bank statement and cancelled cheque
In case of disability, a certificate from the local government body may be asked for

Once your claim is approved, your insurance company will start waiving your premium payments. You will continue to be covered under your policy and will not have to make any premium payments during the waiver period.

Waiver of Premium in iSelect Smart360 Term Plan

iSelect Smart360 Term Plan is the online term plan from Canara HSBC Life Insurance. Apart from the versatile benefits and flexibility of premium and death benefit payments, the term plan offers premium waiver benefits for the following claims:

Critical Illness Claim
Accidental Total & Permanent Disability Claim

If you happen to suffer any of the two problems your family will continue to have the safety umbrella while you recover, that too, without the need for extra premiums.

If you have a life insurance policy with a waiver of premium benefit rider, this means that your life insurance premiums will be waived if you become disabled or get affected by a critical illness and are unable to work. This rider can provide peace of mind in knowing that your life insurance coverage will not lapse if you are unable to work due to a disability.

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised to exercise their caution and not to rely on the contents of the article as conclusive in nature. Readers should research further or consult an expert in this regard.

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