What is a life insurance waiver of premium for disability?
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A waiver of premium is an added rider for your life insurance policy that ensures someone will continue to pay your policy premiums if you’re too disabled to work. This helps to make sure your life insurance policy remains in force with your original benefit. We will cover what is waiver of premium is, what they do, how they work and whether one makes sense for you.
This added rider makes certain the insurer will take over all of your premium payments on your life insurance if you become “totally disabled.” Your policy remains the same and so does your benefit amount – you simply stop paying premiums for the term you’re unable to earn a salary.
You decide when purchasing your policy that you want to add this waiver of premium rider (in most cases you cannot add this feature to an existing policy). For the duration of your policy, you pay your premiums. Should you become unable to work for at least 6 months of continuous total disability, and the insurer agrees that this falls under the policy’s definition of totally disabled, your insurer will start paying your premium payments. This period for a qualifying disability to kick in is typically three to six months.
Once approved as totally disabled, the rider will continue to pay your premiums until a predetermined cutoff age. If your condition improves and you start working again, most insurers will let you utilize the rider again at a future point, but if you experience a different disability later on the 3-6 month waiting period may start again.
A waiver of premium rider can increase your premiums by as much as 10-25% on a term policy, or even less for whole life insurance premiums. For example a typical increase of premiums on a 30 year term policy might be about $15-$50 monthly or more depending on your age and health. You may pay higher for the waiver of premium rider for riskier professions such as those in construction. Rider cost also tends to increase after the age of 40, so adding a waiver rider in younger years is less expensive.
| Factor | Typical Detail (U.S.) | Source |
|---|---|---|
| Waiting/elimination period | 3–6 months of continuous total disability | MoneyGeek; Thrivent |
| Added cost — term life policies | ~10%–15% of annual premium | Insurance.com (MetLife) |
| Added cost — whole life policies | ~3%–5% of annual premium | Insurance.com (MetLife) |
| Estimated monthly rider cost | $10–$50/month | MoneyGeek |
| Typical eligibility age | 18–60 at time of purchase | Insurance.com; Northwestern Mutual |
| Typical coverage cutoff age | 60–65 | MoneyGeek; Thrivent; Northwestern Mutual |
| Lifetime disability risk | More than 1 in 4 of today's 20-year-olds will experience a disability lasting a year or longer before retirement age | Council for Disability Awareness, via Guardian |
You should consider purchasing a waiver of premium rider on your life insurance policy if you:are between 18 and 60, since this rider cannot be purchased after the policy has been put into force by most insurers are the main wage earner for your household have a physically challenging job or hobbies with elevated injury risk have a family history of illness, such as chronic illness do not have the financial cushion of six months to a year’s worth of living expenses to fall back on during a period of lengthy unemployment The need for waiver of premium will diminish if you already have robust disability income insurance or a substantial amount of savings, such as enough for at least a year of living expenses, already set aside.
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The waiver of premium rider offers you one of the least expensive options for making certain your life insurance protection will continue during an incapacitating illness or injury. It may not be essential if you have enough income to survive if you are too injured or ill to work. You should always understand the definitions of total disability, the waiting period, and the coverage cut-off age before selecting waiver of premium as an add-on.
Paige Cerulli Paige Cerulli is a freelance content writer and journalist who specializes in personal finance topics. She graduated from Westfield State University and brings more than a decade of professional writing experience to the ConsumerCoverage team. Paige’s work has appeared in outlets including USA Today, Business Insider, and more.
