Term Insurance Waiver Of Premium

When you shoulder the responsibility of your family, you may have often wondered what the world would be like without you in it. Would your family be financially independent? Would they be able to manage their everyday expenses? Would they be able to pursue the dreams they had when you were with them?

Being the breadwinner of the family, having a term insurance plan is something that can help you ease these constant anxieties. While term insurance can offer much-needed financial support to your family in case of your death, what would happen in case you are unable to continue paying the premiums for the policy? A critical illness or an accidental disability may make you lose your job, and in such a scenario, what happens to your future plans?

This is where term insurance with riders seems to be a much smarter and wiser option. When you choose a rider, you get to enhance the coverage of your regular policy to a much bigger degree. While almost all riders offer excellent benefits, the Term Insurance Waiver Of Premium Rider is a rider that offers unique benefits. While the other riders offer an advantage after the death of the insured, a waiver of premium rider can extend support to you, the insured individual, as well.

Term Insurance Waiver Of Premium Rider

Under certain circumstances, certain term insurance plans waived the premium paid by the insured. The circumstances are generally accidental death or disability where the individual is no longer capable of paying the required premiums. Term Insurance Waiver Of Premium Rider, the WOP, can either be a rider that you can purchase over and above your insurance policy, or it can be a built-in feature. In both cases, in the event of the insured’s death or disability, the future premiums are waived. Fa feature found most commonly in child plans, with the waiver of premium, the policy continues till the predecided/ original tenure, and all the benefits of the plan remain intact.

A waiver of premium enables you to enjoy the coverage without worrying about paying the premium in the event of disability or if you are incapable of working. However, make sure you understand the following things about the Waiver of the Premium Benefit.

• When the base policy terminates, the rider benefit also comes to an end
• Once the insured has attained the age of 65 years, the waiver of the premium benefit comes to an end
• To avail of this premium waiver benefit, you need to submit proof confirming your disability to your insurance provider
• Waiver premium benefit is not applied to every life term insurance plan
• The benefit of waiver can be claimed only once
• Some plans also implement a waiting period before availing of the waiver of premium rider.

Once you purchase term insurance, you need to pay the premium amounts at regular intervals or as a lump sum at the time of policy purchase to avail of the coverage benefits. Let us take a look at this example to understand how the waiver of premium benefits works. Ravi Kanth buys a term insurance plan with the Waiver of Premium Rider, with the following details:

• Sum Assured: INR 50 lakhs
• Policy Tenure: 40 years
• Premium Paying Policy: 15 years
• Waiver of Premium Rider: Included

After 5 years of policy purchase, Ravi suffers total disability in a motor accident. He lost his job and was unable to pay the upcoming premiums. As he had opted for a Waiver of Premium Rider, after his accident, he would now not have to pay any more premiums. If he passes away during the policy tenure, his nominee will receive the sum assured of INR 50 lakhs. If he outlives this tenure, the policy will come to an end along with the rider.

Waiver of premium rider allows you to stop paying the premium amount in difficult situations like critical illness or disability. It offers multiple benefits as follows.

1. Keeps your policy intact

   Waiver of premium rider keeps your term life insurance active. Even if you are incapable of paying the premium, it does not let your policy lapse in any unusual situation.

2. Protection against unforeseen incidents

   In case the policyholder dies or suffers disability before the policy tenure, his/her future premium is waived.

3. Save on taxes

   Under section 80C, you can avail of tax benefits up to INR 1,50,000 on the premiums that you pay towards your life insurance policy. Just keep in mind that the premium is not above 10% of the sum assured.

4. Saves your family from financial obligations

   Your family is not obligated to pay any further premium in your absence to avail of the policy benefit, giving them a secure and stress-free future.

Below are the listed documents that help in easy claim settlement:

• Correctly filled and signed claim application
• Original and scanned copy of policy details
• Residence proof
• Identity proofs
• Photocopy of the insured and nominee’s bank account’s passbook
• Disability proof issued from a government-authorised hospital
• Critical illness proof such as diagnosis, reports, and other related documents from a recognised hospital and doctor.

Exclusions of the Waiver of Premium Rider:

Below are a few exclusions of the waiver of premium rider, death and disability due to the following reasons not covered:

• Suicide
• HIV/AIDS
• Pre-existing condition
• Genetic disease
• Illness or disability due to any criminal activity
• Sport or adventurous injury,War, riots.

Owing to the long list of advantages that Waiver of Premium Rider comes with, it would be a smart move to opt for this benefit as an add-on or even as an in-built feature. Life is uncertain, and while you may not be able to avoid or avert an unfortunate incident, you have the power to safeguard your future and the future of your loved ones. You can make your term insurance plan more comprehensive when you include the WOP in your policy.