5 Reasons Waiver Of Premium Rider Is A Boon

Reasons To Opt For Waiver Of Premium Rider
Endnotes

A rider is a type of insurance policy that provides extra coverage and risk protection to an existing policy. Riders are optional, extra terms that are priced separately and apply to a person's current insurance policy. Insurance riders are inexpensive add-ons to an individual's current life insurance policy. They are designed to complement and widen a person's insurance coverage to cover more than just the cost of death.

The premium rider is waived in the event of unanticipated circumstances such as dismemberment, disability, or significant illness as a consequence of an accident, sickness, or other cause. Aside from the rider exempting a person from paying future insurance premiums. The insured individual's family continues to benefit from the policy's main benefits, which may include bonuses, guaranteed income streams, or fund value growth, depending on the policy's kind. To understand more about waiver of premium rider, read on.

Reasons To Opt For Waiver Of Premium Rider

Following are some of the listed reasons to opt for waiver of premium rider -

Policy Lapse Prevention

The main advantage of including a waiver of premium benefit rider in a life insurance policy for an insured person is that it prevents the policy from expiring owing to non-payment of premiums. It's crucial to understand that a person can't submit a claim on a life insurance policy that has already expired. As a result, this add-on function assures that their insurance remains valid even if they do not pay the stipulated payment installments.

Policy Continuation

The majority of life insurance plans will expire if the insured person dies within the policy's term. In this case, the predetermined death benefit is paid to the nominee of the relevant insured individual. If an insured person adds a waiver of premium rider to their life insurance policy, it will continue to pay until the policy's term expires. As a result, including a premium waiver rider in a life insurance policy for an insured person is always a good idea.

Protection Of Financial Goals

A physical problem may throw a person's life into full turmoil, causing them to fall behind on their bills and abandon their financial aspirations. As a result, the affected family may face severe financial difficulties, as well as significant medical expenditures and mental distress. A waiver of premium benefit allows an insured person to keep their insurance even if they are unable to make any more payments.

Financial Security

Tax Rebates

The tax relief connected with a waiver of premium rider is one of the most important advantages. In this case, Section 80D of the Income Tax Act of 1961 permits a policyholder to claim a tax deduction of up to Rs 25,000 for the acquisition of a health insurance policy or a health-based rider with a life insurance policy. Furthermore, under Section 80D, senior citizens are eligible for a tax deduction of Rs. 50,000.

Endnotes

Due to the multiple benefits that a waiver of premium rider provides, including one in an individual's life insurance policy is always a wise decision. In addition to providing life insurance, this provision makes an insured individual's policy more comprehensive and helps them protect their family's income in the case of a prolonged disability or catastrophic illness.