Disability Waiver of Premium
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Definition of Disability Waiver of Premium
The Disability Waiver of Premium is an additional feature, or a 'rider,' that can be attached to a primary insurance policy in India. This rider provides the benefit of waiving off future premium payments on the main policy in the event that the policyholder becomes permanently disabled and unable to work.
How the Disability Waiver of Premium Works
Once the Disability Waiver of Premium rider is added to the policy, if the policyholder becomes permanently disabled as defined by the terms and conditions of the policy, the insurance company will continue the policy without requiring any more premium payments. The policy benefits continue as per the original terms and conditions of the policy, ensuring that the policyholder or the beneficiaries are not financially burdened during a critical time.
Importance of the Disability Waiver of Premium
The addition of a Disability Waiver of Premium can bring significant benefits in terms of financial security. In cases where the policyholder is the primary earning member of a family, their inability to pay the premium due to a permanent disability can lead to the policy lapse, leaving the family without the financial protection of the insurance. This rider ensures that the policy remains active, thereby providing continued financial protection.
Considerations When Opting for a Disability Waiver of Premium
When considering whether to add this rider to an insurance policy, it's important to read and understand the specific terms and conditions of the rider, including the definition of disability. Generally, a disability is considered to be a medical condition that prevents the policyholder from working in any occupation. However, the specific definitions may vary from one insurer to another. Also, remember that adding a rider to a policy usually increases the premium amount, so it's important to consider this additional cost.
Limitations of the Disability Waiver of Premium
While the Disability Waiver of Premium provides added financial security, it also has some limitations. The waiver applies only if the
disability is deemed to be permanent, and this determination is based on the insurer's specific criteria. Furthermore, there may be waiting periods, exclusions, and other limitations that apply.
The Disability Waiver of Premium can be a beneficial addition to a policy of insurance, offering additional financial security amid adversity. Before adding this rider to their insurance, policyholders should make sure they are completely aware of all of its terms and conditions.
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