If for whatever reason you get injured and your income is no longer available, using your life insurance policy as a buffer can help to not interrupt your lifestyle and financial obligations.
Life Insurance riders are a great way to add additional benefits and coverage to your policy – life insurance does not have to be a one-size-fits-all type of product.
For instance, the Waiver of Premium Disability rider does not require the insured individual, if seriously injured, to pay their insurance premiums while disabled, yet their coverage remains the same.
You are at Higher-Risk than you think
The Waiver of Premium for Disability rider is particularly useful for people in careers that are considered high-risk, such as police officers, firefighters and pilots. The American Council of Life Insurers reported that, in 2010, 87% of all individual life insurance policies included a Waiver of Premium for Disability rider.
The high percentage of Waiver of Premium Disability riders is due to the extended careers that are considered “risky,” by the insurers. Some of these professions include bus and truck drivers, convenience store clerks, nurses, moving company “movers,” housekeepers, parking lot attendants, trash collectors and waiters, to name a few.
So who determines eligibility for this rider? Some insurance companies develop their own rating list and others depend upon individual state insurance commissioners. Also, activities such as skydiving, scuba diving or bungee jumping may also factor into your eligibility for the Disability Waiver.
Because of the nature of this rider, the guidelines and regulations are very specific and may be quite different, company to company. However, here are some of the key features:
Depending upon the insurance company, the Waiver of Premium Disability rider does not usually take effect until six months after you become disabled. During that time, you must continue to pay your premiums but will be reimbursed after the waiting period ends. If the disability recurs, you do not have to repeat the waiting period unless it’s a different disability.
Length of benefit
Most Waiver of Premium for Disability riders are available for policy-holders aged 18 – 60 and expire at age 65. The purpose of the waiver is to protect your income; after retirement, the waiver becomes unnecessary.
Cost of rider
While the Waiver of Premium rider is usually inexpensive, it really depends upon your age, health, and your personal amount of risk.
The Waiver of Premium Disability rider is both popular and of great benefit to anyone who might need it. In the event of injury, this rider could make the difference for yourself and your family to maintaining coverage.