YOU ASK:

When do I qualify for life insurance waiver of premium?

WE ANSWER:

Life brings many bad surprises and if worse comes to worst you should be sufficiently prepared for the times when you might not be physically able to work.

Premium payments can be particularly burdensome in periods of disability. Therefore, financial experts recommend adding the waiver-of-premium provision to life coverage, particularly if the face amount of the insurance is large.

The waiver-of-premium rider provides that the premiums are lifted for the period of disability, while the life coverage continues to be in force.

Waiver-of-premium riders vary from company to company in terms of period of coverage, waiting period and especially in their definition of total disability. The four general requirements that you need to meet to qualify for life insurance waiver of premium are the following:

  • You need to have become disabled before a certain age, usually 60 or 65. If the insured becomes disabled at 60, for instance, half of the companies won't provide waiver of premium, while the other half are likely to waive the premiums only until age 65.
  • You need to have been continuously disabled for six months. However, some companies use a shorter waiting period, such as four months or less.
  • You need to provide the insurer with satisfactory evidence of disability. You might also be required by the company to provide such once every year.
  • You have to satisfy the definition of total disability, as provided by the policy. Some policies can define total disability in more liberal, while others - in stricter terms.

    Most insurers use the following liberal definition:
    Inability to perform one's job for two years, then any job for which reasonably suited by education, training, and experience.

    The majority of insurers include conditions that are presumptive of total disability, such as "the loss of bodily members". Very few insurance companies include no presumptive conditions in their definitions of total disability.

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