Clauses For Waiver Of Premium

It could be beneficial to you to consider waiver of premium on life insurance policies and other financial products.

Points to note

Waiver of premium can be very helpful at a time when your circumstances have suddenly changed, creating a situation of financial stress.

In such cases, you will not be forced into paying your policy premium, providing you meet the criteria to qualify for this support. For this to become effective, you will need to have this clause in place from the outset; it is not usually something you can add in later. There may be a time span before the cover you gain can begin and there could be age and health related limitations.

If you already have a policy in place for income protection, then this type of waiver may be unnecessary.

It’s always a good idea to get impartial advice and speak to your insurance provider first. However, a waiver clause can help to cover costs on insurance premiums or other financial support until you become buoyant again and can cope.

Be aware that to have this clause in place on your policy, you will probably be required to pay more; it will be classified as an optional extra.

The most popular policy for which the waiver option is chosen is life insurance, although there are other products to which it can be applied.

One of the main advantages of including this feature in your policy is that if you find when you take out a policy could mean that if you can no longer work because you’re you become seriously ill or disabled, and can no longer work, then you can be assured that your premiums will be paid, keeping your insurance cover intact.

It is strongly recommended you read your Terms and Conditions carefully and learn about different inclusions or exclusions such as unemployment and health temporary issues. You may be surprised to discover that a waiver may already be in place on a policy to cover such situations.

Issues to note

Before you take out an option for a day waiver on your premium, check it is suitable for your particular situation. Find out first if you already have income protection in place or you could be paying twice for the same amount of cover.

There is a set of criteria which you need to meet in order to be eligible for a waiver premium; you will be required to provide proof. These will be set out in the Terms and Conditions.

Are you aware…?

The average time to elapse before a waiver of premium can begin is 6 months; before this time delay, you will need to continue to pay the premiums yourself until such time as your waiver can begin.

In cases whereby your physical state affects your work, the provider may insist that you will not be able to perform activities that require walking, mounting stairs, bending, running or walking.

It is therefore important to know for which type of work a waiver premium provides you with cover.

Protection may be offered to you for a variety of circumstances:

• Your own occupation – if you are unable to fulfil requirements for your specific job.
• Suited occupation – if you are unable to perform a job suited to your experience and skills.
• Any occupation – if you are unable to work at all.

What is the time period for payments?

If you need to draw on your waiver, then it will continue running until one or more of the following happens:

• The life insurance term ends
• You become fit enough to return to work
• A change happens when you no longer quLify for a successful claim

Waiver of premium with health insurance

Health, and life, insurance policies carry an option for a waiver of premium clause and usually work in a similar way.

Waiver of premium with critical illness cover

Critical illness cover products can also include a waiver of premium. However, bear in mind that if the illness that prevents you working is what kick starts the pay-out of the critical illness policy in the first place, the waiver of premium may be unnecessary.

Waiver of premium on income protection insurance

If you have income protection insurance in place, it works in a similar way to waiver of premium and it is not necessary to pay for both. However, waiver of premium means that you won’t have to pay your policy premiums during periods when the income protection policy is paying you benefits.

Kevin Patterson