Waiver Of Premium Rider

A clause in an insurance policy that waives the policyholder's obligation to pay any further premiums should he or she become seriously ill or disabled. A waiver of premium allows people to benefit from an insurance policy, even when they cannot work.

Investopedia Says:
For an upfront charge, most insurance companies will incorporate a waiver of premium into a policy. The waiver is usually associated with life insurance policies, and requires the policyholder to be disabled for a specified amount of time, such as being incapacitated for six months. To have a waiver of premium, some companies may also place other requirements on the policyholder, such as being healthy and below a certain age.

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Clause in an insurance policy providing that all policy premiums will be waived if the policyholder becomes seriously ill or disabled, either permanently or temporarily, and therefore is unable to pay the premiums. Some policies include a waiver-of-premium clause automatically, while in other cases it is an optional feature that must be paid with additional premiums. During the waiver period, all policy benefits remain in force.

In life insurance, action by an insurance company canceling premium payments by an insured who has been disabled for at least six months. The policy remains in force and continues to build cash values and pay dividends (if it is a participating policy), just as if the insured was still making premium payments. Experts suggest that this clause should be considered in a life insurance policy since the probability of becoming disabled is 7 to 10 times greater than death at younger or middle ages.