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Importance of Waiver of Premium

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Life insurance is often looked forward as an investment plan. Other than providing financial security to your family after you, there are various lesser known benefits that insurance Policy brings along. One among them is Waiver of premium. Most insurance policies have a clause that exempts the policy holder from paying insurance Premium in case of serious disability or illness. Hence, until the incapability exists, the Insured can get the benefit of premium waiver.

Through the waiver of premium, the Insurer puts forth a promise to continue the cover even if the insured has an encounter with uncertain circumstances. It immunes the policy holder from premium payment at a situation when the insured is in acute health care or suffers from severe damages and is off from work for a long period of time. Some policies include this clause by default while on others it is optional. However, it can be taken advantage of only when the insured is out of work for a prolonged period, say sixty days.

There are various considerations required for obtaining the benefits of waiver of premium. The first thing to be noted here is when a person opts for an investment plan with a premium waiver, there is an upfront fee charged. The insured becomes eligible for a waiver in premium only when s/he is unable to work because of some sickness or incapability for a long period of time. This tie can be sixty or ninety days depending upon the terms of the insurer. Also there should be no break in between this time. Last but not the least; the benefit of the waiver of premium can be availed only under a certain age, generally 60 or 65years.

However, there are different terms of premium waiver in different insurance companies. Some of them provide partial benefits and the total premium payment is not exempted. There are companies who charge the installment at a later period when the insurer regains the physical and financial health. Also, insurance companies continuously require periodic proofs for waiver of premium. The facility discontinues until the insurer crosses his 65th birthday.

Waiver of premium becomes of crucial importance in child life insurance plans. In such plans, the premium waiver clause applies to the guardian or the parent on whom the child is dependent. If the parent dies while the child is still a minor, the premium payment for the later years gets waived off. Thus, such plans do not put extra load to the child for paying the premium, however, the cover continues. It also provides waiver benefits in case of accidents or total disability. Thus with child life insurance plans you can be sure of the future of your child to be secured and irrespective of the uncertainties.

When looking for benefits from a life insurance plan, it is always suggested to pay special attention to the details and understand the insights of the policy so as to attain most satisfying results. A premium waiver may cost you a little extra, but for those who want a complete cover will be glad to own the benefit in the investment plan.