Waiver Of Premium For Disability

Waiver of premium for disability is a provision in an insurance policy that states the insurance company will not require the insured to pay the premium if the they are seriously injured. Insurance companies can vary in their definition of a disability, and policies can vary on when and for how long they will waive a premium in the event of a disability. Also, insurance companies may charge a higher premium to include this waiver in the policy.

Two types of insurance policies that commonly include a waiver of premium for disability are life insurance and disability insurance. The waiver can mean the difference between the insured being able to keep the policy or having to give it up if he or she becomes disabled, is unable to work and no longer has an income. This waiver is particularly important for disability insurance because if the insured had to pay premiums after becoming disabled, they would not be protected against the peril they were trying to insure against.

Usually, this waiver applies retroactively to the beginning of the disability. If the insured made premium payments while the waiver was in effect, those premiums are usually refunded. Many insureds choose to have this rider attached to their policy because in the event of a disability, it allows the policy to continue functioning normally on all fronts, including the death benefit, dividends and cash values. When the disability ends, the policy owner starts making premium payments again.

Issues can arise if an insurance company denies a life or disability insurance claim based on non-payment of premiums because the insured thought that the waiver of premiums was in effect. How the provision functions varies by contract, and every life insurance policy defines "totally disabled" differently. It is important to speak with an attorney if a claim is denied based on non-payment of premiums or the insurance company declared the decedent not totally disabled as defined in the policy.

Usually, a person is considered totally disabled if he or she can't perform the duties of an occupation for which he or she is qualified by education, training or experience. The disability must be caused by an injury or sickness. For example, if Harry sells cars, his duties include speaking with customers about buying cars. If an injury or illness prevents him from being able to handle this and other related duties, he will usually be considered disabled.