Importance of Waiver of premium rider in child education plan

Child Insurance Plans 

Child insurance plans are investment cum insurance plans that help in financially planning your child’s future such as higher education at the right age. These plans require the accumulation of money over a period of time and then on maturity, a lump sum amount or the total amount is paid to a child that helps to cover their education expenses. 

Why Do You Need It? 

Investing in a child insurance plan is one of the best ways to save for your child’s future requirements such as higher education. Nowadays, education costs are rising and a parent needs a sufficient amount of savings to make their children achieve their goals. Child insurance plans offer amazing financial protection features and benefits that ensure your child will get the best in the future, even if you are not around. 

There are several child insurances plans available in the market but the primary question comes to the mind of every customer: How to go about it? How to choose a plan? What features to look for in a plan? When it comes to your child’s safety, the availability of riders under your chosen child insurance plan is important. Riders are the additional or add-on to an insurance policy that is availed by paying an extra premium. Several riders such as income benefit, an accidental death benefit is available that you can attach to your insurance policy as per your requirements. But when it comes to child insurance, Waiver of Premium Rider is one of the most important riders to be considered. It is one of the most frequently purchased rider options added along with basic insurance coverage. 

What Is Waiver Of Premium Rider? 

Waiver of Premium Rider is an additional cover purchased to increase the value of your life insurance policy. This rider ensures that your child continues to get every policy benefit, even in your absence. In case of an unfortunate event such as disability or injury due to an accident, the waiver of premium rider takes care of all the premiums required to be paid in the future. It also ensures that the paid premiums are waived off, in case you lose a sole earning member of your family because of an illness or injury. 

So, this Waiver of Premium Rider reduces the financial burden of paying all the future premiums in case of the demise of the breadwinner of the family. In such situations, a child continues to receive uninterrupted coverages. The entry age of waiver of premium rider is ranging from 18 years to 65 years of age. One of the unique features of this rider is that there is no limit on the maximum premium to be waived off. Apart from all these benefits, most insurers activate the rider on the diagnosis of first critical illness or any accidental or permanent disability. 

It is always not important to add the waiver of premium rider, there are various plans which offer this rider as an in the policy features and benefits such as Aditya Birla Sun Life Child Insurance plan. 

Benefits Of Waiver Of Premium Rider 

• Protection Against Critical Illnesses, Total Permanent Disability, Or Death – If the parent is diagnosed with a critical illness such as cancer, kidney failure, heart stroke, etc. and unfortunately dies during the policy, then waiver of premium of rider helps the child to cover the remaining premium amount. In case of total permanent disability or death, the rider helps you against the financial burden, thus you can enjoy the benefits of your base policy. 
• Waiving Off Future Premiums – In case of death, total permanent disability, or critical illness, all your future premiums will be waived off and you will not be responsible to pay any of the future premiums of your policy. 
• Tax Benefits – You can get the tax benefits on premium paid against the term insurance including waiver of premium rider. The premiums on riders are exempt up to Rs. 1.5 lakhs under section 80C of the Income Tax Act, 1961. 
• Pocket-Friendly Premium Rates – Most of the insurers offering child insurance plans provides an in-built waiver of premium rider. It also can be added to the existing base cover in case of its unavailability. 
• It Does Not Lapse – Adding a waiver of premium rider ensures that your policy does not lapse because of an unfortunate incident. With this rider, you can always be stress-free that your child’s future is protected at all times. 

How Does This Waiver Of Premium Rider Work? 

Parents want their child’s futures to be safe and secure. Because of which they go for a child insurance plan where they want their child to receive the benefits at the desired age and at a right time. Let’s understand this with the help of an example: 

In the case of a regular child insurance plan, if Shweta has a 3-year-old child and she wants to save Rs. 50 lakhs for her daughter when she crosses 21 years of age. If one day, unfortunately, Shweta dies because of an accident, the sum assured and the fund value will be provided to the nominee and the plan ends. But in case of a waiver of premium rider, even after the death of Shweta (the policyholder), the plan will continue. The insurance company pays the sum assured amount to the nominee and the premiums will also be paid by the insurer on a due date. 

Exclusion Under Waiver of Premium Rider

There are some of the major exclusions associated with this rider. We have listed a few of them. Let’s take a look: 

• Injury or death due to war, nuclear attack, invasion, or riot 
• Injury or death because of any involvement in a criminal activity 
• HIV/AIDS 
• Congenital infections 
• Injury or death due to hazardous activities or adventurous sports 
• Injury or death due to ailments diagnosed during the policy’s waiting period 

Key Points 

Some insurers require the policyholder to meet specific needs such as to be healthy and fit at a certain age to qualify for the waiver of premium rider. 

Policyholders should consider including this rider in their base policy coverage. 

Waiver Of Premium Rider Secures Your Child’s Future – Conclusion 

If you are using a regular child insurance plan, you only get to enjoy the benefits as long as you are paying premiums on set dates. But waiver of premium rider ensures that your child will get the complete maturity benefit at the right time, even in your absence. It is always advisable to read all the terms and conditions of the availed child insurance plan.