Should I buy a Waiver of Premium Rider?

When you buy a term plan, you have to pay your premiums regularly or your term policy will lapse.
 

But what happens if 
 

• You are suddenly diagnosed with a critical illness or 

• You have suffered a serious injury, leaving you permanently disabled?

You may find it difficult to continue with the premium payments owing to some financial hardships. 

That’s where the Waiver of Premium Rider comes in! It is an add-on benefit you can opt for when buying a term plan. 

If you have opted for this rider, the life insurance company will continue your term policy but waive off all future premiums if you are ill or disabled. 

Remember, this rider is applicable only upon the diagnosis of a critical illness or a permanent accidental disability and not if you simply forget to pay the premiums. 

Yes, you should, especially if:
 

• You work in a hazardous profession 

• You’ve to travel frequently

• You’ve to visit dangerous/accident-prone locations for work

• You have a potentially dangerous hobby such as rock climbing, any form of racing, etc. 

It will enable your family to continue to stay covered and avoid a policy lapse, despite your current financial situation. Bonus: The peace of mind you get knowing your family's financial future continues to remain secure despite this mishap is priceless. It may even help you recover soon!

Let's look at an example to understand:

Say, you took a term policy for 20 years but met with an accident in year 8. 

With this rider, your premiums for the remaining 12 years are waived off but the policy benefit remains intact. 

If you pass away in, say, year 14, your family will get the full life cover you chose.

Isn't this reason enough to opt for this rider?

If you are eligible to buy a term insurance plan, you are eligible to opt for the Waiver of Premium Rider. 
 

Find out if you are eligible to buy a term plan.

Good news!

The Waiver of Premium Rider is one of the most affordable riders available. 
 

The actual cost of the rider will, of course, vary from insurer to insurer. 

Pro tip: Some insurers will include this rider option in your basic term plan or with other riders like the Critical Illness Rider or the Permanent Disability Rider.

So keep an eye out for such automatic exclusions.

You can opt for this rider when buying your term insurance plan.

As part of the application process, you will be asked to opt for the rider or not (depending on your insurer). 
 

Alternatively, you can also buy this rider on your policy anniversary.

The exact process of buying will vary from insurer to insurer so speak to them or an insurance broker/agent/advisor to know the details.

No, you can’t.

The Waiver of Premium Rider covers you only in the case of a critical illness diagnosis or a permanent accidental disability. In case of any negligence on your part, you won’t be able to avail its benefits.

It totally depends on your insurer. Some insurers, in some term plans, will cover you for the entire policy duration while others may set an age limit. 
 

For example, you may have a term policy that covers you till 85 years but your insurer may set an age limit of 65 years for your Waiver of Premium rider.

Check the rider brochure or just speak to your insurer before you buy.

Yes, of course. You can always buy the Waiver of Premium Rider later on your policy anniversary, subject to you meeting the insurer’s eligibility criteria. 

The policyholder will not get any benefits of the Waiver of Premium Rider if a critical illness or disability is caused due to the following: 
 

• Attempted suicide or self-inflected injuries

• Alcohol or substance abuse or any drug use except under the direction of a registered medical practitioner

• Participation or practice of any hazardous hobby unless agreed by the insurer

• Participation in any aviation activity, other than as a passenger in a commercially licensed aircraft

• War, invasion, civil commotion, breach of law, or willful participation in violent activities

• Any criminal act

• HIV/AIDS infection 

• Pregnancy or childbirth or complications

Remember, the exclusions will vary from insurer to insurer.

Speak to your insurer to check the complete list of rider exclusions.

Yes, you can get tax deductions on premiums up to ₹ 1 lakh under Section 80C. 
 

Want some more good news? All the rider benefits are tax-free, under Section 10(10D), subject to exclusions.