Waiver of Premium Rider in ULIP 

What is Waiver of Premium Rider in ULIP?

A Waiver of Premium rider is a safety net which, when activated by an emergency covered by your plan, ensures that the premium payment is taken over by the company on behalf of the policyholder. This means that in case of the unfortunate death or permanent disability of the policyholder, all further premiums from the date of the incident are waived off while the plan continues to run as usual, earning returns until it matures on a predefined date. The core condition to get the benefits of a Waiver of Premiums rider is to add it to your ULIP plan when you purchase your policy. 

How Does Waiver of Premium Rider Work in ULIP?

• Adding the rider at the inception of the plan: If you wish to benefit from the features of the waiver of premium rider, it is crucial to add it to your policy when you buy it. No further additions are allowed at any point when the policy is running.
• Dormant phase of the rider: Once the rider is attached to the policy and it starts running, the policyholder regularly pays their premiums, wherein a part of the premium is kept aside as life cover and the rest is invested into the market through various funds as per the policyholder's choice. The rider remains dormant during this time. 
• Trigger event: In case an event happens which is covered by the policy, a valid claim can be made, which, when approved by the insurer, activates the rider. 
• Activation of the waiver of premium rider: Once the claim is verified by the insurer, the following action takes place.
  • The nominee or the policyholder is completely relieved from paying any future premiums.
  • The insurer takes over and pays all the remaining premiums as scheduled.  With certain comprehensive riders, the insurer pays the future premiums for the base policy along with all the attached riders. 
  • The Waiver of Premium rider is terminated once the claim is paid,d and the policy remains to run as usual until maturity.
• Continuation of policy: Your policy keeps on running, your money remains invested, and your life cover remains intact after the waiver of premiums is terminated. When the policy matures, the nominee receives all maturity benefits along with all accumulated investment returns.

Key Benefits of the Waiver of Premium Rider

The WOP provides an investor with a vital layer of financial security. The following points list the key benefits of the waiver of premium rider.

• Guaranteed policy continuation and active life cover: The key benefit of a WOP rider is that your policy remains active despite your inability to pay your premiums due to a covered crisis. Your life insurance cover continues, and the policy remains active until maturity.
• Uninterrupted investment and wealth growth: A ULIP waiver of premium also ensures that your investment remains active in case of any mishap as covered by your plan. This means that your market-linked investments will keep on generating returns until maturity, the final sum of which will be paid to the nominee as originally planned.
• Elimination of Financial Burden for Dependants: In case of an unfortunate incident, which makes the policyholder unable to pay their premiums for policy benefits for their family, a WOP ensures that the family remains protected irrespective of the presence of the policyholder. This means that the dependents will not have to pay anything to keep the policy running and receive its benefits. 
• Affordable and cost-effective: The rider can be added to your base plan for a nominal and small addition to your premium. This makes it highly effective and value for money as it provides the investor with a backup safety net and peace of mind. 
• Coverage against unpredictable risks: A waiver of premium provides coverage against a list of unpredictable risks. These include untimely demise, accidental total and permanent disability and specified critical illnesses.

Inclusions under Waiver of Premium Rider 

While inclusions under waiver of premium depend on your insurer, here are some common inclusions under a waiver of premium rider. 

• Most riders trigger if the policyholder is deemed totally and permanently disabled during the policy term.
• The death of the policyholder triggers the rider, and all future premiums are waived to keep the policy active. 
• Some riders also extend the rider to specified critical illnesses. 

Exclusions under Waiver of Premium Rider 

Like inclusions, exclusions of the waiver of premium rider also depend on your insurer and the plan of your choice. Some common exclusions under WOP include 

• Any disability or illness that existed before the plan was bought and the rider was attached to it.
• Death caused by self-inflicted injuries or suicide attempts
• Death or injuries sustained due to illegal activities
• Partial disability 
• And disability or death due to hazardous occupation.

Conclusion

The waiver of premium rider is one of the key riders which can help you sustain your family financially in the long run. It provides you with a safety net which activates in case of a mishap and ensures that your family remains financially protected and is not burdened with the payment of any premiums in your absence. It also ensures that your family is able to benefit from all the features of the plan irrespective of your presence.