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What Is A Waiver Of Premium Rider?

life insurance waiver of premium rider

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Jessica Martel
Updated August 30, 2022
3 Min Read

An insurance rider is a form of optional coverage you can add to your policy at an additional cost. A rider allows you to customize your coverage to best fit your needs. A waiver of premium rider protects your policy from lapsing in the event you become disabled and can no longer pay your premiums.  

While no one wants to think about suffering a disability that leaves them unable to work, the truth is, one in four adults in the U.S. is living with some form of disability. It’s important to ensure you have the proper insurance in place to protect yourself and your family. This article explains how a waiver of premium rider works, how much it costs, and if it’s really worth it. You can visit Policygenius to get a quick overview of policies and providers.

How Does A Waiver Of Premium Rider Work 

When purchasing life insurance, you may have the option to add a waiver of premium rider to your policy, up to a maximum age (such as 60 or 65). You must purchase the waiver of premium rider at the time your life insurance policy is issued. You will also need to go through an approval process which usually involves a review of your overall health, your job, and your hobbies. 

To use the rider, you must submit a disability claim to your provider. There is a waiting period (usually six months) between the time of your injury and the time your application is accepted. 

During the waiting period, you are required to pay your premiums. If your claim is accepted, you will be reimbursed for the payments you made during the waiting period. Coverage will last during the time you are disabled. When you are able to return to work, your coverage will end and you will need to resume your premium payments. 

How Much Does A Waiver Of Premium Rider Cost?

The cost of a waiver of premium rider will depend on several factors including your age, overall health, and your insurer. According to Haven Life, the typical cost is between 15% and 25% of your monthly life insurance premium. For a young, healthy person purchasing a life insurance plan, this would end up being a fairly minimal addition to your monthly premium. 

What Is The Waiting Period For A Waiver Of Premium Rider?

The exact waiting period for a waiver of premium rider will depend on your insurer and policy. There may be a waiting period between the time you purchase your policy and the time you are able to use the waiver of premium rider. 

Some policies also have a waiting period between the time of your disability and the time your premium riders take effect. This is often approximately six months but the length of time will vary between providers. In many cases, your insurer may refund the premiums you pay during this waiting period. 

How Do You Qualify For A Waiver Of Premium Rider?

A waiver of premium rider is an available option with many life insurance policies. Whether or not you qualify will depend on several factors including your age, overall health, any pre-existing conditions, as well as what you do for work and fun (your hobbies). 

Those who are younger, healthier, and lead a life of minimal risk are more likely to qualify than those who are older, less healthy, and have a riskier lifestyle.

It’s important to review the details of your policy and the conditions that are required to activate your waiver. Many policies don’t kick in until you have been disabled and off the job for a period of six months or more. The waiver of premium rider will typically end when you are no longer disabled. However, if you experience a long-term disability, the premium payments will typically be covered up to a particular age (such as 65). 

Note that some states do not allow the sale of waiver of premium riders. You will need to check whether or not this rider is available in your state and with your life insurance provider. 

What Are The Claim Requirements?

For your claim to be accepted, you must provide proof of total disability. This is usually in the form of a doctor’s statement that confirms total disability, when it happened, and how it happened. You may also have to provide your medical records. Additionally, you may be asked to provide a notice from the Social Security Administration (SSA) as further confirmation of your disability. 

Is A Waiver Of Premium Rider Worth It?

Life is unpredictable and having the proper insurance in place is one way you can prepare for your future. However, if you are considering a waiver of premium rider, you may also want to take a look at disability insurance as this can often be a better option. Disability insurance offers more financial support by paying a portion of your overall income. Whereas, a waiver of premium rider only pays your life insurance premiums.