Life insurance riders help customize your life insurance policy. The waiver of premium rider will pay for all of your future life insurance premiums if the insured happens to become disabled. This waiver of premium rider is not included with every policy. It’s an optional rider that you typically have to pay an extra fee to include. The waiver of premium rider is one of the most popular life insurance riders available to shoppers.
Definition of Waiver of Premium Rider
The waiver of premium rider is defined by a life insurance policy add-on that waives the insured’s premiums if they are disabled for six months. The insured’s premiums will begin again once the disability ends. How the disability is specifically determined will be made by each individual life insurance company.
How expensive is the waiver of premium rider?
Price is significant to shoppers and the added cost of the waiver of premium rider is something important to consider. For the average term life insurance policy, the waiver of premium rider may add around 15% to 25% to your monthly premium.
Let’s say you’re a healthy 35 year old man and you’re purchasing a 30-year, $750,000 term life policy. Your life insurance premium would be around $53 per month. Depending on the carrier, the availability, and your state- the waiver of premium rider may add on about $8 a month to your policy.
Ultimately, your cost will be based on how old you are, your health, and risk level. The life insurance company will assess your risk to see how risky you are in the future. If you’re currently risky (for example, you have disability now), you may not even qualify for this rider.
Who benefits from a Waiver of Premium rider?
So who needs a waiver of premium rider? Anyone shopping for life insurance that doesn’t have a source of income to pay for their life insurance if they become disabled.
It’s great thing if you buy a life insurance policy to protect your loved ones. However, it’s only good if you can keep that policy in force for the entire time you need it. What if you have paid for your policy for several years and become disabled and can’t work. Will you stop paying for your life insurance policy? If this is a possible situation that you may face- the waiver of premium rider might be something to look into.
This is especially true for anyone who has an occupation that has higher than normal risk. If your job is risky and your chances of getting hurt on your job- it’s a good idea to think about this rider.
What is the waiting period on a waiver of premium rider?
The waiting period that needs to occur before the waiver of premium is triggered is 6 months. The actual terms of the waiver of premium rider will be varied and determined by each life insurance company. The benefit lasts until you’re no longer disabled and you can file multiple claims.
What if the disability is long term?
If you are subjected to a long term disability, your life insurance premiums will be waived up to a specified age. Depending on the carrier, you may be covered up to ages 65, 70 or whatever age is stated in the policy’s contract.
Will I qualify for the waiver of premium rider?
You can typically get the waiver of premium rider if you’re between the ages of 18 and 60 and are free of any disabilities that would disqualify you.
When do I need to buy the waiver of premium rider?
The waiver of premium rider needs to be purchased when you apply for your life insurance policy. You can’t add it later on in the future like you can with some other life insurance riders.
Waiver of Premium Pros and Cons
Like anything, there are advantages and disadvantages. Let’s look into the pros and cons of the waiver of premium rider.
- Protects you and your family by paying for your life insurance premiums in case you get disabled.
- You won’t stress about how to pay for your policy if you get a disability.
- You’re not limited to one occurrence. The waiver of premium doesn’t have a limit for the number of times it’s used.
- The waiver of premium rider is an additional cost.
- You must buy it when you apply.
Waiver of Premium Conclusion
If you have question or interested in adding the waiver of premium rider to your life insurance policy, please let us know. As stated, many riders need to be added before you have your policy issued so you don’t want to miss the opportunity to add it. Contact us now and let us see how we can help you.