4 min read
Updated on Oct 31, 2022
Sad but true that none of us are going to live forever. There is a time when all of us will see the end of our time. However, if it is too soon, it can not only be heart-breaking for our family but it can also affect them financially. This is why so many people these days go for term insurance policies. And if you want to double the benefit, you can consider LIC’s Premium Waiver Benefit Rider.
It is a non-linked, individual non-participating rider that you have to buy with a term insurance plan. This rider is allowed only under a base plan. This option is basically for a situation when the premium payments that are payable under Base Plan can be waived off. If the policyholder passes away before the completion of the plan, this rider will enable waiving of the LIC premiums. The rider can be bought while buying a term insurance plan or any time during the policy term. This rider can also be bought with a child policy. In the case of a child policy, the premium is paid by a parent. On the sudden demise of the parent during the policy tenure, the premiums to be paid in the future are all waived off until the child turns 25 years old.
If you are buying the LIC’s Premium Waiver Benefit Rider, you need to understand how it works. So, let us take an example for the same.
For example, you purchased a child policy of INR 5 lakhs and the tenure of the policy is 30 years. After completion of the policy tenure, your child will receive the maturity benefits of the policy. And all these 30 years, you being the parent of the child have to continue paying the premiums. However, in case you pass away before the policy tenure is completed, there has to be someone who can continue paying the premiums so that the child receives the maturity benefits of the plan. When you opt for the premium waiver benefit in LIC, the future premiums are waived off and the maturity benefit does not get affected at all.
Mentioned herein below are some of the things that you as a policyholder must be aware of. Let us shed some light on them.
When you buy LIC’s Premium Waiver Benefit Rider, you will get certain benefits with it. Let us discuss some of them.
If the policyholder passes away during the term of the rider, the premiums to be paid under the Base Plan after the death to the expiry of the Rider Term will be paid by the insurance provider. Nevertheless, the premiums that are paid for the other riders, which are different than this LIC”s Premium Waiver Benefit Rider are not waived off. It is continued to be paid according to the terms and conditions of the respective rider. If the premium paying term of the base plan exceeds the rider term, the due premiums under the base plan from the expiry date of this rider will be paid by the insured according to the terms and conditions of the base plan.
This rider is not a part of the Corporation when it comes to profits. Therefore, the insured does not receive any bonus.
If the policyholder survives through the Rider Term, maturity benefit will not be paid to him/her.
If the policyholder commits suicide within 12 months from the date of starting this rider or within 12 months from the revival date the rider will be held useless. The claims will not be sanctioned by the term insurance company under such situation. However, if the policy is in force, 80% of the premium paid under LIC’s Premium Waiver Benefit Rider will be refunded.
Along with this rider, you can check out information about several other insurance policies as well as riders online.
Also Read: LIC vs. Private Insurance Companies in India
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