November 22, 2017

Waiver of Premium

The waiver of premium is one of the most common riders for life insurance policies. The provision exempts the insured from paying premiums after he or she has been disabled for a specified period of time, usually six months in life insurance policies and 90 days or six months in health policies. The insured must pay an additional premium to get this protection. Riders typically end at a specific age 60 or 65. If the waiver of premium rider is attached to a whole life insurance policy then the policy cash value continues to grow just as if insured was paying the premiums.

The waiver of premium for Universal life policies is sometimes called waiver of cost of insurance. It typically waives the cost of insurance but does not pay the total premium the insured was paying. The result is that no excess premium goes into the cash value, but no expense costs are taken out of cash value either because cost of insurance is waived. Cash value remains intact and continues to earn interest.

In most cases, DFW (Dallas Fort Worth) Life Insurance can attach waiver of premium riders to the life insurance policies we write.

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