What are Premium Waivers
A premium waiver is an optional extra on most life insurance policies. Term life insurance policies have no intrinsic ‘cash-in’ value, so if you stop paying your premiums the cover will cease, usually 30-days after payment of your last premium. This is great if you wish to move your policy to another life insurance provider – however, it also means if you can no longer afford to keep up your life insurance premiums due to unemployment or sickness it means that your cover will cease. Clearly not an ideal state of affairs – especially during what is already a stressful time.
This is where your life insurance premium waiver comes in. A premium waiver means that the life insurance provider will agree to keep up your premiums and therefore your cover if you are unable to pay your life insurance premiums due to involuntary unemployment or illness. However, you won’t get something for nothing, opting for a premium waiver as part of your life insurance package will put your premiums up a little each month – but this may be a small price to pay for the additional peace of mind that a premium waiver can provide.