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Most insurance companies in the UK will cancel your policy if you miss a payment. This can be an issue if you suddenly become ill and you’re unable to work. In order to ensure that your life insurance policy isn’t affected during the period that you are incapacitated, you can add a Waiver of Premium clause to your contract.
This add-on allows you to keep your policy by covering the payments that you’ve missed.
The add-on will cover your missed payments until you are fit to work again or until your policy has run its full course. To get this add-on, you’ll need to opt-in when taking out a new policy, as you won’t be able to add it later when you’ve already purchased your life insurance.
To utilise the Waiver of Premium, you’ll need to meet the requirements stipulated by your insurance provider. The most common policies will only allow you to activate the add on if you’re unable to work due to illness or injury. The incident also needs to have happened during your insurance term.
The insurance company will usually request a doctor’s note as proof of your disability to verify your claim. Some companies, although not common, also allow your Waiver of Premium to cover a period of unemployment or redundancy. However, this type of add-on is usually more expensive.
You should note that you won’t immediately be eligible for cover once you’re unable to work. Depending on the insurance company, you’ll usually have to wait for a certain period (typically three, six, or nine months) before the Waiver of Premium kicks in.
It’s essential to understand what type of incapacitation is covered by the Waiver of Premium. With some insurance companies, the add-on will only provide cover if you’re unable to work any job, whilst other companies will only offer cover if you’re unable to do your own occupation.
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To add Waiver of Premium to your life insurance policy, you’ll have to pay a higher premium. The exact cost will depend on various factors, such as your age, medical history, health, smoking status, and occupation. As a result, to get an accurate quote on how much this policy costs, you should get in touch with an insurance provider.
A Waiver of Premium add-on can act as an extra layer of security for your life insurance policy. Think of all the effort you’ll go through only to be ruined by an unfortunate situation that can lead to you losing your insurance policy. If you’re employed in a hazardous job or take part in extreme sports, getting a Waiver of Premium policy is definitely worth it. On the other hand, if you feel like you’re at low risk, you can always get a cheaper premium and opt out.