Waiver of Premium

A waiver of premium is a policy feature that allows insurance coverage to remain active without requiring premium payments if the insured person becomes totally disabled and unable to work. It protects policyholders from losing coverage during a period of financial hardship caused by disability, ensuring that benefits such as life, disability, or health insurance continue without interruption. The insurer waives future premium payments while maintaining all original policy benefits.

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The waiver of premium provision typically begins after a waiting period, often between 90 and 180 days, once the insured meets the policy’s definition of total disability. Coverage remains in force for as long as the disability continues and premiums would otherwise have been due. Once the insured recovers and returns to work, premium payments resume, and the waiver ends automatically.

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Example:

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If you become disabled due to a serious illness and cannot work for more than 90 days, your life insurance policy’s waiver of premium clause allows you to keep your coverage in place without paying monthly premiums until you recover or reach the end of the policy term.

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What to Watch For:

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Verify the waiting period and the insurer’s definition of total disability, as these determine when the waiver applies. You must continue paying premiums until the waiver is approved, after which the insurer may refund payments made during the waiting period. Some policies require periodic medical updates to confirm that the disability is ongoing.