Term of the week

Waiver of premium rider

Most life insurance policies today offer the ‘waiver of premium’ rider. This rider waives the outstanding premium when the life insured meets with an accident and turns disabled or reports critical illness. Thus, while the policyholder continues to enjoy the life cover, there is no obligation to pay premium. In child insurance policies, where the parent’s life is insured with a lump-sum going to the child after a period of time, the ‘waiver of premium’ rider activates when the parent passes away. It ensures that the policy continues to be in force and invests the premium regularly, and the maturity amount is given to the child after the promised number of years. However, note that since the ‘premium waiver’ comes as a rider, you will have to cough up premium separately for it. Bajaj Allianz Life eTouch Online Term is one of the few that offers this benefit inbuilt in its term policy.

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