Waiver of Premium
The Purpose of a Waiver of Premium
Waiver of Premium is a common provision included in most group life insurance policies. It is intended to provide continued life insurance coverage for an employee who becomes totally disabled prior to the age specified in the contract (typically 60 years of age) if the waiver of premium claim is approved.
As a rule, the waiver period starts after the employee has been out six months, or as specified in the contract, and continues until the employee reaches age 65 or is no longer disabled.
The Importance of Filing Claims in a Timely Manner
Waiver of premium claim forms must be filed within a specified time, typically twelve months from the disabled employees’ initial date of disability.
Generally, a waiver of premium form should be completed for any employee applying for Long Term Disability benefits or if it appears the employee will be out of work at least six months. Employees out on Workers’ Compensation are also eligible for waiver of premium.
The Consequences of Not Properly Complying with the Provision
If an employer does not file a waiver of premium claim within the specified time in the contract, or does not file the claim at all, life coverage may be denied. It is very important to make sure you understand how your waiver of premium works and file all claims on time.
