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Buying life insurance is not something you look forward to. While it is not a product people want to use, it is definitely a product that all individuals in each stage of their adult life need.
When you buy any type of standard or specialty life insurance product, you have to consider a myriad of different factors.
For starters, you will need to build a plan that meets your current needs and that will grow with you as you experience different life events.
For example, your need for life insurance will undeniably change when you go from renting to owning or from being a married couple to being a family of 4.
Deciding how much coverage to purchase now and what type of policy is best for you can be a difficult task. You have to assess your life insurance needs, review your finances, set a budget, review different insurance carriers, and then distinguish between each type of plan to make the choice that is best for you.
This may be a time-consuming process but it is not where it ends.
You also need to consider the specific features of a plan and the riders that you can add on to protect yourself if life does not go as planned.
This is what many consumers fail to research and when they do do the research it is often too late.
You never want to fail to select a policy with a rider that could save the day in the future just because you did not know it was available to you. One of the more beneficial riders that is included in some plans and can be added to others is called the life insurance waiver of premium.
Read on, and find out what you need to know about riders in general and how a waiver of premium rider can help you down the line.
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What is a life insurance policy rider?
When you buy a standard life insurance policy, both you as the policy owner and the company must know the terms of the plan and comply with the conditions set forth by the policy.
While standard policies do work for some, others who want a more customized plan have the option to add riders to their plan to make life insurance work better for them.
Riders can be easily defined as supplemental benefits that you have the option to take advantage of.
Generally, to get these supplemental benefits you must in exchange pay a higher rate for your coverage.
The cost of the added rider will depend on the rider that you are choosing and also on the amount of coverage you carry.
In most cases, charges for riders are fixed and will only change if the amount of coverage that you carry changes. Rider premiums do not go up as you age if you have a plan that has level premiums.
Waive of Premium Rider Basics
Now that you understand that a rider is just industry lingo for supplemental coverage or policy add-ons, the next step is to learn which life insurance riders you would find to be most beneficial to you.
Perhaps the most popular rider and also the most useful rider is the waiver of premium rider. The waiver of premium rider adds a special clause onto the plan that states that your premiums will be waived if you become disabled while the policy is in force.
In order for the premiums to be waived under this policy rider, your disability must be classified by the insurer as a total disability. You must review the definition of total disability with the insurer, but in most cases it is the same definition as the one used by the Social Security Administration.
The definition of total disability says that you are considered totally disabled when you cannot do the work you did before, you cannot adjust to new work, and the disability will last at least one year.
What are the advantages of adding the waiver to your plan?
When you want supplemental coverage, it comes at a cost. Sometimes, the additional is worth the money and other times it is not. You must determine what the likelihood will be that you will ever use the rider and if the value the rider presents outweighs the cost.
Many who know what the waiver of premium rider is feel like it is a worthwhile supplemental option to pay for.
Due to the fact that it is like a disability plan for your insurance policy, it can really help when you are out of work and living on a limited income.
The last thing that you want to do when you are disabled is lose your life insurance. Not all disabilities will affect your ability to qualify for life insurance, but there is a chance that the medical condition could affect your rates in the future if you were to let your policy lapse.
Letting your insurance lapse is also the last thing you want to do because you will live at-risk of passing when you have no insurance. Not to mention the fact that the new policy that you purchase will be based on your health and your age at the time of application.
Waiver of premium riders are extremely affordable.
Insurance companies will set their own rates for their policies and their riders, but in most cases the cost for the rider are in the same range. The cost for the rider will only cost a few dollars out-of-pocket per month.
Some companies may collect the entire cost for the waiver upfront when the policy is issued.
Most of the time premiums are based on the insured’s age. but this depends entirely on the product you purchase.
When you consider that having this added insurance can help you maintain your insurance when you ultimately would not be able to, you can see how this could be a great option.
When you have the rider, you do not need to use the income you would receive from your disability policy or from SSI to pay for the insurance invoice.
This will leave you more money to put aside or to pay your other bills while you are disabled.
What You need to Know About the Waiver of Premium Rider
You may want the rider, but you do still need to know the terms and conditions of this clause before you buy insurance.
One of the main reasons why it is not beneficial to you to learn about the waiver after you have already purchased a plan is because this waiver must be added to your policy when it is issued. You cannot decide at a later time that this is something that you want unless you are willing to re-qualify and buy another plan at your new age.
Another factor that you must keep in mind is that many companies have age restrictions for this rider. They may require that you are under 60 to even be offered the benefit at inception.
If this restriction is not present, be aware that for the rider to pay, the disability or the event that led to disability must have happened after the policy was purchased. If you are worried about a pre-existing disability flaring up in the future, the policy premiums will not be waived because the cause was before the policy was in effect.
What do you need to file a claim?
Many people do not worry about the steps that they must take to file a claim because they will not be the one to file the claim. If you have a living benefit like the waiver of premium, knowing how to file a claim just in case you need to can be helpful.
To file your claim, you should contact the insurer as soon as you are disabled to find out how long you need to be disabled to file.
You may need to present a signed doctor statement, a SSA letter and a rider claim form.
When you gather all of this documentation then you can mail it to the company and when the rider form is approved then the premiums will start to be waived. Once the disability ends then you will begin to pay premiums once again.
Now that you know what a waiver of premium rider is you can decide if you want to add it to your plan. If you feel like this is the right type of rider to add to your future life insurance plan, you need to be sure to request it when you start the quoting process.
If you want to compare premiums quickly without having to pick up the phone and call many different agents, you can use a rate comparison tool.
Simply enter your personal information and then you will be directed to a page where the rates through many different life insurers will be instantly displayed. Use the FREE tool below!