Disability Waiver of Premium Rider

A Waiver of Premium Rider is a provision in an insurance policy that allows the policyholder to waive the premium payments in the event that they become disabled and unable to work. This rider ensures that the policy remains in force even if the policyholder is unable to pay the premiums due to their disability.

Here are the key features of a Disability Waiver of Premium Rider:

• Definition of Disability: The rider will define what constitutes a disability and under what conditions the premium waiver will take effect. Typically, the definition is tied to the policyholder's ability to work in their own occupation or any occupation, depending on the specific terms of the policy.
• Elimination Period: The rider may have an elimination period, which is the length of time the policyholder must be disabled before the waiver of premium takes effect. This is typically 90 days to six months, but it can vary depending on the policy.
• Premium Waiver: Once the elimination period has passed and the policyholder is still disabled, the waiver of premium will take effect, and the policyholder will no longer have to pay premiums for the duration of the disability.
• Additional Benefits: Some Waiver of Premium Riders may also offer additional benefits, such as a return of premium in the event of the policyholder's death while the rider is in effect.

• Cost: The cost of adding a Waiver of Premium Rider to a policy will vary depending on the insurance company, the policy, and the age and health of the policyholder.

Example: John has a disability insurance policy with a Waiver of Premium Rider. He becomes disabled due to an injury and is unable to work for six months. After the 90-day elimination period, the rider kicks in, and John no longer has to pay premiums for his policy. He continues to receive disability benefits until he is able to return to work.