Why you should opt waiver of premium rider in child education plan
Raj is the father of 2 young daughters. He recently visited his friend, Aman who was in a car accident and was bedridden. Because of this accident, Aman couldn’t work and his family’s financial situation was dire. During their conversation, Aman informed Raj that he had not been able to pay the premium for his child’s education plan for a few months and it was about to be closed.
This conversation had worried Raj as he too had invested in education plans for his children. What if something happened to him and he was not able to pay the premiums, who would look after his family? Raj researched and found out about the waiver of premium rider and its benefits, which are as follows:
What is the waiver of premium rider?
A waiver of premium rider is an add-on cover that increases the value of your life insurance plan. If you get the waiver of premium rider, your child will enjoy all the benefits of the policy, even if you are no longer present. In case of an unfortunate event such as an injury or disability due to an accident, all the remaining future premiums that have to be paid are looked after by this rider. In case of loss of the sole earning member of the family, the future premiums get waived off because of this rider.
The waiver of premium rider ensures that even after the demise of the sole earner, the child continues to receive coverage by the child education plan. There is no ceiling for the maximum premium that can be waived off. Usually, if the breadwinner is diagnosed with a critical illness or any accidental or permanent disability, this waiver of premium rider is activated then.
Activating the waiver of premium rider in child education plan
To gain the waiver of premium benefit, you will need to :
- Submit a disability claim which includes a physician’s statement and a claim form.
- Make premium payments during the waiting period. The waiting period is the time between when you sustain your disability and when the benefits of the rider begin. The waiting period differs from plan to plan but usually, it is six months. After your claim is accepted, the insurer refunds the premiums paid during the waiting period.
Benefits of opting for Premium Rider Waiver in child education plans
The waiver of premium rider comes with a lot of benefits, which are as follows:
- Security against Critical Illness, permanent disability or death- The number one benefit of this rider is that in case of diagnosis of the parent with any critical illness such as heart stroke, cancer, etc. In case of permanent disability or death during the policy, the premium rider helps in covering the future premiums and helps in reducing the financial burden for the family.
- Future premium – The future premiums payments may become a huge problem for the family of the child in case of critical illness, permanent disability or death of the breadwinning parent. The rider helps in waiving off all the future premiums. You will not have to pay any future premiums in that circumstance.
- Tax Saving benefits-This rider helps you in getting tax benefits on the premium payable towards the term insurance plan as well the add on of the waiver of premium rider. Under section 80c of the Income-tax Act,1961, the premium on riders may be exempt up to Rs 1.5 lakhs.
- The plan does not expire- The premium waiver rider add-on to ensure that your child education plan does not lapse because of an unforeseen event. This means that the parent can be stress-free about the child receiving the benefits of the waiver in the future.
- Reasonably priced- Most child education plans already come with a premium waiver rider built-in but if your plan doesn’t have it, the rider can be added to the base plan with a small added fee.
- Flexibility- Most waivers of premium rider plans in children education plans can be added or removed as required.
A parent’s most important goal in life is to make sure their children can have a bright, happy future and they can live their life comfortably. When you buy a Child education plan you are protecting their future, but what if due to some circumstances you are not able to provide for this plan. The waiver of premium rider helps in protecting your plan and ultimately your child’s future. Read all information in the child’s education plan and decide wisely.
How to purchase a waiver of premium rider in children's education plan?
Generally, when you buy the policy you can opt for the waiver of premium rider for a fee. The cost of the fee depends on age, health, insurer and other risk factors. This rider may not be available to you if you are above the age limit of the plan or have a pre-existing disability.
Are there any exclusions under a waiver of premium rider?
Yes, there are some exclusions that are included in this rider.
Injury or death due to:
Involvement in criminal activity
Hazardous activities and adventurous sports
Illness diagnosed during the policy's waiting period.
3. Congenital disease