Premium Waiver
Fundamental terms that define how a life insurance policy works.
What Is Premium Waiver?
A premium waiver — formally a waiver of premium rider — is a policy provision that exempts the policyholder from making premium payments during a period of total disability, as defined by the policy, while keeping the policy fully in force. The insurer effectively pays the premium on the policyholder's behalf during the qualifying disability period. This protects the policy from lapsing during what may be the most financially stressful period of the policyholder's life. Most waiver of premium riders require a waiting period of 90 to 180 days of continuous disability before benefits activate, and disability must begin before a specified age (often 60 or 65). The rider must typically be added at policy issuance.
Nevada Context
Nevada workers in physically demanding occupations — common in the state's construction, mining, and outdoor industries — benefit most from waiver of premium riders. Available disability definitions vary by carrier licensed in Nevada.
How It Affects You
Without a premium waiver, a disabling accident or illness could force you to stop paying premiums and lose coverage at exactly the wrong time. This rider is one of the most cost-effective protections you can add to a life insurance policy.
Premium Waiver in Practice
A Nevada electrician becomes disabled at 48 after a fall; after his 90-day waiting period, his waiver of premium rider activates, and his insurance carrier pays his illustrative $180/month whole life premium until he recovers or reaches age 65.
Dollar amounts shown are illustrative. Actual amounts vary by carrier, applicant age, health status, and individual underwriting.
Related Glossary Terms
Related Resources
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