A waiver of premium rider is a policy add-on that protects your life insurance from lapsing if you become disabled and can no longer pay your policy’s premiums.
The rider can be difficult to qualify for and offers less financial support than a disability policy, so it’s often helpful to compare your options with an insurance agent before purchasing.
How does a waiver of premium rider work?
The waiver of premium rider allows you to forgo premium payments if you become disabled and can’t work for six months or more. The waiver doesn’t cover disabilities caused by pre-existing conditions.
To use the rider, you’ll submit a disability claim to your insurer.
You must pay your premiums during the waiting period — the time between your injury and when your rider benefits begin.
Most insurers have a waiting period of six months, but you should check with your life insurance company to confirm.
If you qualify for the waiver, you’re refunded any premiums you paid during that period.
Your premiums are covered as long as you remain disabled. Once the disability ends and you can work again, you’ll resume making payments.
How much does a waiver of premium rider cost?
The waiver of premium rider is a flat fee that’s added on to your base premium and remains the same throughout your policy. Based on Policygenius data, this rider could cost an extra $10 to $50 per month, but the cost will vary depending on your age, health, and amount of coverage you’re buying.
If you’re considering applying for life insurance and adding the waiver of premium rider, you can connect with a Policygenius expert for a free, personalized quote.
How do you qualify for a waiver of premium rider?
To qualify for benefits, your condition must fall within the insurance company’s definition of disability and you must be under the waiver’s maximum age limit.
Meeting the definition of disability usually requires you to have a total disability. For most insurers, that means you’re under the regular care of a licensed physician for your injury or illness and one or more of the following apply to you.
You’re able to work but have lost sight in both eyes or have lost two limbs.
You’re unable to perform any duties of your current occupation (for an initial period).
You’re unable to perform the duties of any occupation for which you’re reasonably qualified (after the early years of your disability).
Each insurer sets its own guidelines about disability qualifications — if you’re buying a life insurance policy with this rider, the life insurance agent you’re working with will be able to review specific qualifications with you.
Are there age limits for waiver of premium riders?
Some insurers have age limits on when you’re able to qualify for benefits under the waiver of premium rider.
Common age limits are 60 and 65 years old.
If you’re over the age of 55 or 60 and you’re applying for a new life insurance policy, you may not be eligible to add a waiver of premium rider due to your age, either.
If this situation applies to you, working with an independent broker is a quick and easy way to compare guidelines across multiple insurers, so you can be sure you’re getting the best policy for your needs.
Is a waiver of premium rider worth it?
In most cases, people are better off buying a standalone disability insurance policy instead of adding a waiver of premium rider to a life insurance policy.
A long-term disability insurance policy can pay monthly benefits equal to approximately 60% of your income. Those benefits will help you cover all of your bills and expenses, rather than just your life insurance premiums.
A waiver of premium life insurance rider doesn’t offer any protection for your earned income — plus, it can be difficult to qualify for depending on your insurer.
Speaking to an independent insurance agent or certified financial planner is the best way to determine which insurance plans and riders are best for your family’s financial needs
