A life insurance policy could come with an attached rider (an additional coverage that is not included in the original coverage) specifically called waiver of premium. It is an additional feature that could ensure that the life insurance policy would still be in effect despite failure to continue payment of regular premiums in the event of income loss, illness, or accident that lead to temporary or even permanent disability. The waiver of life insurance premium is usually availed to make the policy fully mature to be available to beneficiaries in case of the policyholder’s death.
Many life insurance policies automatically include waiver of premium clause. However, in most cases, the policyholder has to request and take it as an added rider. Logically, additional fees are charged for this feature. It is advisable that any policyholder talk to his/her insurance advisor to know more about possible options and at the same time clarify specific terms and conditions that come with the rider.
A waiver of life insurance premium would allow a policyholder to automatically stop making premium payments when there is income loss. The loss could be temporary (sickness or unemployment) or permanent (disability). Whatever the reason is, the life insurance policy would remain in effect. However, there could be associated restrictions like age and physical conditions, which are clearly stated in the waiver of life insurance premium clause. Policyholders are advised to fully know and understand specific restrictions set. They should also be reminded that they should have lost earnings for at least half a year or six months before the waiver would take effect.
Lastly, the waiver of life insurance premium benefits the beneficiaries more than the actual policyholder. Of course, this is because the survivors would be provided with the payout following the death of the policyholder.