Waiver of Premium
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What is serious disablement?
The definition of “serious disablement” varies between insurers. Some policies define it as being unable to perform at least two daily living activities, such as dressing or bathing, due to sickness or injury before age 65. Others may require you to be unable to work for three consecutive months. It is important to check how your insurer defines disablement, as this determines when the benefit applies.
Please see examples below from a select few below:
Insurer 1:
If you are aged under 65 and you have suffered a sickness or accident and are unable to perform at least 2 activities of daily living.
Insurer 2:
If you are unable to work for at least three consecutive months due to a sickness or injury.
How does the Waiver of Premium Benefit work?
If you satisfy your life insurance company’s definition of serious disablement, your premiums may be waived. In most cases, you will still need to pay premiums during the first three to six months of disablement. Once the waiting period ends, if you remain disabled, the premiums you paid during that time are refunded and all future premiums are waived while you remain eligible.
If after this period you continue to be seriously disabled, the premiums you have paid while totally disabled will be refunded and your future premiums will be waived on your life insurance policy.
How long will my premiums be waived for?
Life insurance companies will generally offer different periods for this option. Generally premiums will be waived until:
- A certain dollar value worth of premiums has been waived
- The expiry of the policy
- At a specific age outlined in the policy
- Your disablement ending
- Your death
When will the Waiver of Premium Benefit not be able to be used?
Your premiums may not be waived if your severe disablement is a result of:
- An intentional self inflicted act; or
- Attempted suicide; or
- Normal or uncomplicated pregnancy or birth; or
- War or an act of war
When you are conducting your life insurance comparison it is important to speak to our specialists about whether or not this benefit is included as part of your policy and when this benefit may be available to be used.
Why Waiver of Premium Matters in Real Life
Life insurance is designed to protect your family financially, but unexpected illness or injury can make it difficult to keep up with premium payments. Without the Waiver of Premium Benefit, many people might face the difficult choice of cancelling their cover just when they require it most. This feature ensures your policy remains active during periods of serious disablement, which means your loved ones stay protected without interruption. For families already dealing with medical costs and lifestyle changes, this benefit provides important financial relief and peace of mind.
Frequently Asked Questions and Answers
Does Waiver of Premium apply to all life insurance policies?
Not all life insurance policies include Waiver of Premium automatically. Many leading insurers build it into their policies, but some only offer it as an optional add-on. When comparing policies, it is important to check whether the feature is included and under what conditions it can be used.Is Waiver of Premium automatically included, or do I need to add it?
In most cases, Waiver of Premium is automatically built into your life insurance policy at no extra cost. However, some insurers treat it as an optional benefit that must be selected when applying for cover. If this feature is important to you, confirm its availability before you purchase a policy.What is the typical waiting period for this benefit?
Most insurers require a waiting period of three to six months of continuous disablement before Waiver of Premium applies. During this time, you continue paying premiums as normal. If your disablement continues beyond the waiting period, your premiums are refunded for that time and then waived going forward.Can Waiver of Premium be claimed more than once?
Yes, in many policies the benefit can be used more than once if you experience separate, qualifying periods of serious disablement. However, each claim must meet the policy’s eligibility criteria, and the total period of cover is still subject to age or policy expiry limits.Does this benefit apply if I am only partially disabled?
Generally, Waiver of Premium requires you to meet the definition of total or serious disablement as defined by your insurer. This usually means being unable to work for an extended period or being unable to perform key daily living activities. Partial disablement by itself may not qualify, unless your insurer specifically includes this in their definition.
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