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A term insurance policy is a type of life insurance policy offered by several insurance companies these days in India. When you have a term insurance policy, you just have to keep paying the premiums regularly. Term life insurance comes with a certain tenure, which can be 20, 30, or 40 years. If you pass away within the tenure, the insurance provider will offer the coverage amount and other benefits to your family. On the other hand, if you survive through tenure, you will not get anything. There is no maturity amount offered to the policyholders or the nominees in term insurance. The only return that you can get is the premiums that you pay throughout the period. This also happens if you choose the Return of Premiums option, which is available on some term insurance plans.
If you want to get the maximum benefits out of your term insurance policy, you can buy a rider along with the plan. For this, you have to pay additional premiums. However, the coverage amount you will get will be much higher. There are various types of term insurance riders offered by the insurance providers; however, the most sought-after among them is the waiver of premium rider.
Waiver of premium, as the name suggests, is one of the term insurance riders that waive off all the future premiums that you would pay to the insurance provider. However, it only happens when you as a policyholder become physically disabled, as a result of which you are not in a state to work and have an income. This rider ensures the continuation of the policy even if the policyholder is not able to make payments of the premium.
There are two situations in which a waiver of premium rider works. The first is when the policyholder suffers from a permanent disability that happens because of an accident, for at least 6 months. The second situation is when the policyholder is diagnosed with a critical illness.
One of the main reasons to go for this rider is that it doesn’t deprive the nominees of the policy of the benefits, even when the premiums are not being paid by the policyholder anymore. This helps the family of the policyholder to manage their finances even when the sole earning member of the family is not in a position to work anymore.
This rider can be bought while buying the term insurance policy. However, you need to know about the fact that you can claim under this rider only once. When the base policy terminates, the rider also gets terminated. The benefits under the rider coverage are paid. The policyholder can get tax benefits while having this rider under the Income Tax Act, 1961.
Also Read: What is LIC’s Premium Waiver Benefit Rider
While you are making term insurance claim for the rider, you would need to submit certain documents for a smooth process. Here are some of them mentioned below:
The waivers of premium rider exclusions are mentioned herein below:
Here are some of the important points that you need to know about waiver of premium rider:
As the waiver of premium benefits are concerned, here are a few of them mentioned below:
If you are looking for the best term insurance plan with riders, you can visit a website where you will not come across one or two such policies and riders but many. This will also enable you to make a comparison between as many of them as possible and accordingly choose one.
Also Read: Standalone Policy vs. Critical Illness Rider
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A Waiver of Premium Rider is an optional add-on to a term life insurance policy that provides a safety net in case the policyholder becomes disabled or seriously ill and is unable to work and pay the premiums. The rider allows the policyholder to continue their life insurance coverage without paying premiums during the period of disability or illness.
If the policyholder becomes disabled or seriously ill, and unable to work and pay the premiums, the Waiver of Premium Rider waives the requirement for the policyholder to pay the premiums for the duration of the disability or illness. This means that the policy remains in force, and the death benefit will be paid out to the policyholder's beneficiaries in case of death during the term of the policy.
The Waiver of Premium Rider provides peace of mind for the policyholder and their family in case of unexpected disability or illness. It ensures that the policyholder's life insurance coverage remains in force, and the death benefit will be paid out to the beneficiaries in case of the policyholder's death. It also helps to avoid any lapse in coverage that could result in loss of the policyholder's investment in the policy.
The cost of the Waiver of Premium Rider varies depending on the insurance provider and the specific policy. However, it's generally not too expensive, and the cost can be offset by the security and peace of mind it provides. The cost of the rider is typically a percentage of the base policy premium.
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