Riders are designed to personalize a life insurance policy so that it better meets the insured’s needs to protect their beneficiaries. One such rider is a waiver of premium, which enables the policyholder to avoid a policy lapse if they become disabled and can no longer pay premiums.
However, life insurance claim requirements in such cases are complex and need to be handled with care to avoid claim denial.
In this article, our life insurance attorneys explain everything there is to know about a waiver of premium provision. From what it is to how it works, reasons life insurance companies will not pay out, and what to do if your claim is denied.
If you have been denied benefits due to no coverage under a waiver of premium, our life insurance lawyers can help. Call 888-510-2212 for a free case evaluation.
Definition: What Is a Waiver of Premium?
Many group life insurance policies offer a waiver of premium provision. A waiver of premium rider is a clause in an insurance policy that provides life insurance coverage in the event of critical illness, serious injury, or total disability and does not require premium payments. This protects the insured from a policy lapse.
It means that a disabled person who applied for a waiver of premium benefit may be covered by the same amount of life insurance they had before disability free of charge. In order to take advantage of this benefit, an insured must apply or send in a request to the insurance company providing coverage within a certain deadline outlined in the policy.
How a Waiver of Premium Works: Claim Requirements
Every group life insurance plan is different and a waiver of premium requirements may vary from policy to policy. Most life insurance companies offering a waiver of premium benefit require proof of total disability that must be certified by an insured’s doctor. In addition, they may place other requirements, such as length of continuous disability and age.
A person who became totally disabled and can no longer work should read their group life insurance policy to check whether they will qualify for a waiver of premium benefit. Generally, satisfactory proof of disability is a finding that:
- the disability has resulted from disease of accidental injury;
- the disability resulted in the insured’s inability to work;
- the insured became disabled before age 60;
- the disability continued for six months before the insured applied for a waiver of premium benefit. However, this waiting period, also called elimination period, varies for each life insurance company.
If these (and other if applicable) requirements are met, the insured may continue life insurance coverage free of charge.
However, receiving this benefit requires an insured to provide proof of total disability at least for the first two years. Many insurance companies will not require such proof after two years of continuous total disability.
Insurance under a waiver of premium benefit is not automatic – it must be applied for and proof of disability must be provided. In addition, an insured should be aware that insurance under this benefit will not continue forever and may end.
How Long Does Life Insurance Disability Waiver of Premium Last?
Usually, life insurance coverage under a waiver of premium ends when an insured is no longer totally disabled or does not submit required proof of continuation of total disability. Insurance may also end when an insured retires or turns 70 (in most life insurance policies). Reviewing your life insurance policy will help you understand in what situations your coverage may end.
Since continuing life insurance coverage under a waiver of premium benefit involves submitting many documents and undergoing many medical exams, very often individuals suffering from a disability do not have the time and energy to follow through with the requirements, which may result in losing this coverage.
In other cases, insurance companies and employers misplace important documents, misinterpret policy provisions and fail to process waiver of premium applications properly. This may result in a wrongful denial of a life insurance claim after an insured’s death.
What to Do if Your Life Insurance Claim Has Been Denied Due to a Waiver of Premium Issue?
A life insurance claim may be denied if the insurance company claims there was no coverage under a waiver of premium benefit at the time of the insured’s death. If this happens, you may feel that the life insurance benefits may not be recovered.
A life insurance attorney can help recover denied life insurance benefits. Insurance companies and employers owe participants of group plans certain duties. They may be liable for denied life insurance claims if they breach their duties and wrongfully deny a valid claim. If you are not sure whether your life insurance claim has been properly denied by an insurance company, seek a legal consultation as soon as possible.
Our attorneys can help you appeal the insurance claim denial or guide you through the ERISA appeal process if your policy is subject to ERISA laws. We have years of experience in handling such cases and can help you win. Here’s a case where we reversed the claim denial after it was denied due to no coverage under a waiver o premium.
We offer free consultations and work on a contingency fee, so there is no legal fee unless you win and receive your life insurance payout. If you have a denied life insurance claim, call us at 888-510-2212 to speak to one of our attorneys.