By Karla Sullivan
Considered by many as valuable coverage to have, a waiver of premium provision helps the insured if total disability happens. If the insured becomes completely disabled as defined by the life insurance company, they will waive payment of premiums on the policy during the continuance of the insured’s disability.
“This type of enhancement is designed to help make life easier for consumers looking to balance their insurance needs against their retirement needs,” said Gene Lunman, senior vice president of MetLife.
Generally, companies will start to waive the premiums for a policy when proof indicates that the insured’s disability has gone on for at least six consecutive months. This is considered a total disability, which means you are unable to work as a result of a mental illness, injury or other disease.
Total disability is defined as the inability to perform essential acts and duties of a job based on schooling, training or experience. If someone can do some but not all of these acts, it is not considered total disability. For example, Judy is a receptionist at an art museum and her duties include answering phones, directing visitors and other data processing jobs. She breaks her arm and cannot type but since she is able to do other aspects of her job, she is not considered to be totally disabled.
John, however, worked in construction and he has become permanently disabled; paralyzed from the neck down due to a severe accident and therefore cannot even work in any type of job, including office work. As a result, he is considered to be totally disabled and is eligible for a waiver of premium.
Many insurance companies do not rely on the Social Security administration to make a decision. They will perform their own medical and policy eligibility review. The individual generally is unable to perform any occupation.
Will the waiver of premium terminate at some point? If:
· The person ceases to be disabled
· Required proof of ongoing disability is not submitted
· No longer under continuing care of a physician
· For some, when an employee retires or reaches a specific age
Do waivers of premium offer cash value?
· The rider does not offer cash value
· There are no loan values
How do I apply for a waiver of premium?
If you have a life insurance policy, contact the company and they will send you a claim packet and talk to a qualified specialist.
According to the Council for Disability Awareness, 1 in 4 of today’s 20 year olds will become disabled before they retire. Typically, it is not an accident that cripples, but cancer, heart disease and other illnesses that will cause long-term absence in the workplace. The duration of an average long-term disability can last almost 35 months. Are you prepared if something happens to you or a member of your family? Talk to a qualified insurance specialist concerning your needs today and in the future.