Waiver Of Premium Rider – Know All About It

by Carter Toni

You get a life insurance as a responsible adult to provide your family with stability in the event of your passing. To ensure that the policy achieves its goal, you pay all premiums on time. But what happens if you have a significant injury or are given a severe illness that prevents you from working and supporting your family? The waiver of premium rider is just what you need in these situations.

When you are physically unable to pay the premium due to a disability, this rider waives off any upcoming premiums to keep the insurance in effect. It is a helpful rider that makes sure your coverage stays in effect even if you don’t pay your premiums, in fact.

When will the rider work?

The following situations allow for the use of the rider:-

  • When the life insured has been disabled for at least six months.
  • When a catastrophic illness, such as cancer, a heart attack, or vascular disease, is identified in a life insured.

Who may receive the rider?

Anyone between the ages of 18 and 65 is eligible.

Does a waiting period exist?

Yes, there is a 90-day waiting time. It indicates that the insurer will only waive future premiums if the insured develops a severe illness or becomes disabled after the policy’s initial 90 days have passed.

What’s the price?

In addition to age and gender, the base life insurance policy’s premium determines the amount of the premium that must be paid.

A life insurance calculator is a tool that will help you calculate the approximate costs of your premium as per your needs.

What paperwork is needed for the resolution of claims?

The following documents must be supplied for a claim to be successfully executed:

  • Completed claim form
  • Original policy documents in copy
  • Current residence and ID proof of the policyholder
  • Additional Documents
  • Copy of the policyholder’s bank book
  • Health issue as stated in a medical statement
  • A certificate of disability from the appropriate government agency

How much longer will the rider go on?

The rider is terminated if:

  • The base policy to which the rider is attached gets terminated
  • According to the rider coverage, all benefits are paid.
  • The policyholder turns 65 years old.

Are there any tax advantages?

The following tax benefits are available to you under the Income Tax Act of 1961:

  • Premiums up to Rs. 1 lakh are eligible for a tax deduction under Section 80C.
  • Benefits derived from the rider are tax-free under Section 10(10D).

The tax benefits mentioned in the article may not apply if you opt for the new tax regime since many tax exemptions and deductions have been scrapped within the new regime. They are also subject to any changes in the law.

What are the rider’s exclusions?

If any of the following factors contribute to a serious sickness or incapacity, the life insured will not receive any benefits:

  • HIV
  • Any illness developing while you’re waiting
  • Any birth defect infection
  • Conflict, invasion, hostilities, unrest, and strikes
  • Involvement of the life promised in a crime
  • Radioactive contamination
  • Participation in risky activities, such as bungee jumping, scuba diving, martial arts, and hunting, among others. 

Relevance of waiver of a premium rider added

The waiver of premiumrider could be a beneficial addition to your term insurance policy because it can give the life assured greater financial security. The following are some justifications for why it’s crucial to have a waiver of premium rider in your term insurance policy:

  1. Financial safety from life’s uncertainties: This rider offers financial security against life’s unforeseen events, such as the premature passing away of the life assured, whether due to natural causes or an accident, accidental total and permanent incapacity, or a critical illness diagnosis.
  1. Policy continuity: The waiver of premium rider provides that, in the event that the life assured dies, has an unavoidable total and permanent incapacity, or receives a critical illness diagnosis during the policy term, all future payable premiums shall be waived off.
  1. Reasonable premium rates: To increase the policy’s coverage, a waiver of premium rider may be applied at the time of policy issuance in exchange for an additional premium. Since the waiver of premiums has a low price, adding it to the base policy’s coverage at a reasonable cost strengthens its power of protection. A life insurance calculator is a tool you may use online to determine the amount of coverage required based on your needs.

*All savings are provided by the insurer as per the IRDAI-approved insurance plan. Standard T&C apply.

  1. Removes the need for extra insurance coverage: As previously said, the waiver of premium rider offers the life-assured financial security from life’s uncertainties, which eliminates the need for additional coverage. This rider ensures policy continuation even after the life assured’s passing and offers financial support during trying times.

Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.

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