Is Waiver of Premium Rider Essential While Buying Child Insurance?

Child plans are generally a mix of insurance and investment that helps in planning a better financial future for your children. These plans also help achieve the goals of your children like higher education.

Child Insurance and Its Benefits

Child insurance plans help build a corpus in lieu of children’s future financial requirements over time. The lump sum amount received upon policy maturity or reaching life’s significant milestones like higher education or marriage.

Most insurance policies also offer multiple add-ons to enhance basic coverage like waiver of premium and income benefit. It is one of the most frequently bought rider options with basic insurance coverage. Moreover, waiver of premium rider comes as an in-built option for most child plans.

Importance of Waiver of Premium Rider

Waiver of premium is an additional option offered under child plans to cover premium costs in case of any unfortunate events. 

For child insurance, parents are the primary policyholders who must pay regular premiums. Consider an instance where you, the primary policyholder, faces an unfortunate event that renders them disabled, injured, or deceased. This rider will ensure that future premiums are waived off while the cover continues its coverage in such a scenario.

Waiver of premium rider further ensures that the policy does not lapse and the child continues receiving the protection to achieve dream or goals. The child will receive a lump sum amount upon maturity of the policy.

Benefits of Waiver of Premium Rider

It offers multiple benefits that you may consider while purchasing the plan and its riders:

1. Protection against critical illnesses

   In case the parent is diagnosed with a critical illness and unfortunately does not survive the term, waiver of premium rider helps cover the remaining term’s premium costs. Some of the critical illnesses the rider offers protection against are cancer, heart attack, kidney failure, and vascular disease.

2. Protection against disability

   If the parent is rendered disabled due to an accident or any other ailment, this rider will ensure that all future premiums are waived off. However, the disability must be for 6 months or more for this rider to work.

3. Low premium costs

   Most child insurance plans offer policies with an in-built waiver of premium rider. In case of its unavailability, it can be added to the basic cover for a small additional premium.

4. Flexibility in opting the rider

   Although most child plans have an in-built waiver of premium rider, most of the policies also facilitate its removal or addition as per convenience. However, keeping the rider option is only helpful during times of crisis.

5. Tax benefits

   The premium paid against the term insurance including waiver of premium rider is exempt from taxes under section 80C of the IT Act 1961. You can claim tax exemption up to Rs 1.5 lakhs.

Exclusions Under Waiver of Premium Rider

Since parents are the primary policyholder, you must know about exclusions under this rider.

Following are the exclusions that most insurance companies have for this rider to work adequately:

• HIV
• Ailments diagnosed during the waiting period of the policy
• Congenital infections
• Injury or death caused due to riot, strikes, war, or invasion
• Injury or death caused due to participation in a criminal act
• Illness or death caused due to nuclear contamination
• Injury or death caused by participating in extreme sports like martial arts, skydiving, bungee jumping, hunting etc.

Safeguarding Children’s Future

Child insurance plans are steadily gaining importance due to inflating costs of raising a child and giving them a good education or life. Buying comprehensive child insurance is one of the best gifts a parent can give their new born children that also safeguards their future.

These plans will help realise their dream irrespective of any eventualities. You can also buy the plan after comparing and carefully considering all the features.

Besides, waiver of premium rider offers additional benefits to the protection base policy offers. 

But before jumping to any conclusion, go through all the points above and consider adding waiver of premium rider to your base policy for enhancing protection.