What is Waiver of Premium Rider in Life Insurance?

Understand the concept and importance of a waiver of premium in life insurance policies, and how does the waiver of premium rider work.
Check Life Insurance Policies
3 min
22-May-2025
Life insurance is a critical tool for ensuring financial security for your loved ones. However, unforeseen circumstances such as disability or critical illness may leave you unable to pay the policy premiums. In such cases, a waiver of premium in life insurance can be a lifesaver. This rider ensures that your life insurance policy remains active, even when you are unable to pay premiums due to specific conditions. This article delves into what this rider entails, its benefits, and how it works to provide you with enhanced peace of mind.

What is waiver of premium rider in life insurance?

A waiver of premium rider is an optional add-on to your life insurance policy that exempts you from paying premiums under certain conditions, such as permanent disability, critical illness, or a loss of income due to unforeseen events. This rider ensures that the policy remains in force, protecting the coverage and benefits for the insured and their beneficiaries.

By adding this rider, policyholders safeguard their investment in the life insurance policy while managing financial stress during challenging times. This makes it a popular choice for individuals who wish to enhance the reliability of their life insurance plans.

Key benefits of adding the waiver of premium rider in life insurance

Adding a life insurance waiver of premium rider offers multiple advantages, enhancing the value of your life insurance policy.

The waiver of premium rider serves as a safety net that prevents policy lapses when you are unable to pay premiums due to specific eligible circumstances. It ensures the continuation of policy benefits without financial strain, making it a prudent choice for long-term financial planning.

Key benefits include:

Financial relief during critical times:

Your premiums are waived, reducing financial burden during periods of disability or illness.

Policy protection:

The policy remains active, ensuring that your loved ones continue to receive the intended financial security.

Affordable add-on:

The rider is cost-effective compared to the potential financial losses from a lapsed policy.

Peace of mind:

Knowing that your policy benefits will remain intact offers immense peace of mind during uncertainties.

How does the waiver of premium rider in life insurance work?

The waiver of premium in life insurance rider activates when specific pre-defined conditions are met, ensuring uninterrupted coverage without requiring premium payments.

To avail the benefits, the policyholder needs to provide evidence of eligibility, such as a medical diagnosis or proof of disability, as outlined in the policy terms. Once approved, the insurance provider waives all future premiums while keeping the policy active.

Key working mechanisms include:

Eligibility assessment:

Conditions such as total disability, critical illness, or accidental injury determine eligibility.

Claim process:

Submit necessary documents like medical reports or disability certifications to the insurer.

Activation of waiver:

Once approved, the waiver is applied, and premiums are no longer required.

Coverage continuation:

The policy remains in force, ensuring all benefits are retained.

How do you apply for waiver of premium rider in life insurance?

Applying for a waiver of premium rider is a straightforward process that ensures added protection for your policy.

Most life insurance providers offer the waiver of premium rider as an optional add-on at the time of policy purchase. It is crucial to understand the terms and conditions, including eligibility criteria and premium costs, before adding the rider. Existing policyholders can also inquire with their insurer about adding the rider during policy reviews.

Steps to apply include:

Choose a suitable policy:

Ensure the policy allows for the waiver of premium rider.

Understand the terms:

Review the conditions under which the rider can be activated.

Fill the rider form:

Complete the application form provided by the insurer.

Pay the additional premium:

Include the cost of the rider in your policy premiums.

Retain documentation:

Keep copies of all forms and confirmation for future reference.

Can you remove the waiver of premium rider after adding it to the life insurance?

Yes, you can usually remove the waiver of premium rider after adding it to your policy, subject to the insurer’s terms and conditions.

If you decide the rider is no longer necessary, you can request its removal by contacting your insurance provider. This might slightly reduce your policy premium. However, removing the rider also eliminates its benefits, so the decision should be made carefully, keeping your financial goals and risk factors in mind.

Conclusion

A waiver of premium in life insurance is a powerful tool that enhances the resilience of your policy during unforeseen challenges. By ensuring continued coverage without the burden of premium payments during critical times, this rider adds a layer of security to your financial plan. Whether you are buying a new policy or enhancing an existing one, understanding and opting for this rider can offer immense peace of mind and long-term value.

Frequently asked questions

How much does it cost to include a waiver of premium rider?
The cost varies depending on the insurer, your age, health, and policy type. Typically, it adds a small percentage to your base premium, offering an affordable way to secure uninterrupted coverage during critical circumstances.

Is the waiver of premium rider available for all life insurance policies?
Not all policies offer this rider. It is commonly available with term, whole, or universal life insurance. Check with your insurer to confirm its availability and suitability for your specific policy.

Do waived premiums under this rider qualify for tax benefits?
No, premiums waived under this rider do not qualify for tax benefits since the policyholder is not making the payments. Only premiums paid out of pocket are eligible for tax deductions.

Are there any restrictions associated with the waiver of premium rider?
Yes, limitations include age restrictions, specific qualifying conditions (like total disability or critical illness) and waiting periods before activation. It’s crucial to review the terms and conditions to understand its scope fully.

Show More Show Less

Bajaj Finserv App for All Your Financial Needs and Goals

Trusted by 50 million+ customers in India, Bajaj Finserv App is a one-stop solution for all your financial needs and goals.

You can use the Bajaj Finserv App to:

Apply for loans online, such as Instant Personal Loan, Home Loan, Business Loan, Gold Loan, and more.

Explore and apply for co-branded credit cards online.

Invest in fixed deposits and mutual funds on the app.

Choose from multiple insurance for your health, motor and even pocket insurance, from various insurance providers.

Pay and manage your bills and recharges using the BBPS platform. Use Bajaj Pay and Bajaj Wallet for quick and simple money transfers and transactions.

Apply for Insta EMI Card and get a pre-approved limit on the app. Explore over 1 million products on the app that can be purchased from a partner store on No Cost EMIs.

Shop from over 100+ brand partners that offer a diverse range of products and services.

Use specialised tools like EMI calculators, SIP Calculators

Check your credit score, download loan statements and even get quick customer support—all on the app.

Download the Bajaj Finserv App today and experience the convenience of managing your finances on one app.

Do more with the Bajaj Finserv App!

UPI, Wallet, Loans, Investments, Cards, Shopping and more

Disclaimer

*T&C Apply - Bajaj Finance Limited (‘BFL’) is a registered corporate agent of third party insurance products of Bajaj Allianz Life Insurance Company Limited, HDFC Life Insurance Company Limited, Life Insurance Corporation of India (LIC), Bajaj Allianz General Insurance Company Limited, SBI General Insurance Company Limited, ACKO General Insurance Company Limited, HDFC ERGO General Insurance Company, TATA AIG General Insurance Company Limited, ICICI Lombard General Insurance Company Limited, New India Assurance Limited, Chola MS General Insurance Company Limited, Zurich Kotak General Insurance Co. Limited , Star Health & Allied Insurance Co. Limited, Care Health Insurance Company Limited, Niva Bupa Health Insurance Company Limited , Aditya Birla Health Insurance Company Limited and Manipal Cigna Health Insurance Company Limitedunder the IRDAI composite CA registration number CA0101. Please note that, BFL does not underwrite the risk or act as an insurer. Your purchase of an insurance product is purely on a voluntary basis after your exercise of an independent due diligence on the suitability, viability of any insurance product. Any decision to purchase insurance product is solely at your own risk and responsibility and BFL shall not be liable for any loss or damage that any person may suffer, whether directly or indirectly. Please refer insurer's website for Policy Wordings. For more details on risk factors, terms and conditions and exclusions please read the product sales brochure carefully before concluding a sale. Tax benefits applicable if any, will be as per the prevailing tax laws. Tax laws are subject to change. BFL does NOT provide Tax/Investment advisory services. Please consult your advisors before proceeding to purchase an insurance product. Visitors are hereby informed that their information submitted on the website may also be shared with insurers. BFL is also a distributor of other third-party products from Assistance Services providers such as CPP Assistance Services Pvt. Ltd., Bajaj Finserv Health Ltd. etc. All product information such as premium, benefits, exclusions, sum insured, value added services, etc. are authentic and solely based on the information received from the respective insurance company or the respective Assistance service provider company.

Note – While we have made all efforts and taken utmost care in gathering precise information about the products, features, benefits, etc. However, BFL cannot be held liable for any direct or indirect damage/loss. We request our customers to conduct their research about these products and refer to the respective product’s sales brochures before concluding their sale.

Show All Text