What is a waiver of premium?

How does waiver of premium work?

A waiver of premium is a type of add-on cover that can be added to your life insurance policy so that if you’re ever unable to work due to a serious illness or injury, your policy stays active. 

Your waiver of premium will cover your monthly payments so you can focus on your health. It can also give you peace of mind and reassurance. If you pass away during your life insurance policy’s terms, your loved ones will still be protected and entitled to make a claim. 

In a way, a waiver of premium is an insurance policy for your insurance policy. Unfortunately, a waiver of premium can’t be added to existing life insurance cover. It can only be added to a brand-new policy. So you’ll need to weigh up the costs of this type of add-on before selecting life insurance cover. 

Learn more: Can I have more than one life insurance policy?

How do I make a claim?

If you’ve already got a life insurance product with a waiver of premium and you’ve been diagnosed with a critical illness or serious injury, contact your insurance provider to activate the waiver. 

When you make a claim, your insurer will have a list of criteria that must be met to approve your claim - these will be outlined in your policy documents.

Will my waiver of premium claim be approved?

Your waiver of premium will usually be approved, as long as you meet your insurer’s criteria and they agree that you’re unable to work. Exactly what counts as ‘unable to work’ will vary depending on the insurance provider and your chosen level of protection. Your insurer might also assess your claim based on the type of tasks you’re unable to perform, such as walking, climbing stairs, writing or typing.

Your cover will usually fall into one of the following categories:

Own occupation: You can trigger the waiver if you’re unable to do your usual job.

Suited occupation: You can activate the waiver if you’re unable to perform your own job or a similar one.

Any occupation: You can only waive the premium if you’re unable to do any job.

Compare life insurance policies and read the policy details before committing to a particular waiver of premium. Choosing the wrong policy could see you having to take on a role you don’t want to do, just to keep paying your premiums. 

Struggling to find the right life insurance and waiver of premium for you? Let our team of specialist insurance experts help. 

Learn more: Best mortgage insurance policies in the UK

What proof do I need to make a claim?

You’ll need to provide proof that you’re unable to work to make a claim on your waiver of premium. This will likely include:

• A copy of your medical records and a doctor’s report
• A report from an assessor chosen by your insurance provider. They’ll usually visit you at home to discuss your situation

Learn more: Tembo’s guide to life insurance for mums

What does no waiver of premium mean?

If you have a life insurance policy and no waiver of premium, this means you’ll need to keep making your life insurance payments even if you’re unable to work. If you stop making the payments, your policy will end and you’ll need to start a new life insurance policy if you want to stay covered.

Keep in mind that a new policy could work out more expensive than your existing one since insurance providers take your age, health and lifestyle into account when you apply. 

If your health and/or lifestyle has improved significantly since taking out your first policy, you may be able to access cheaper premiums than before. However, your costs may be higher if there’s been a decline in your health or a number of years have passed since you bought your original policy. 

How long does waiver of premium last?

A waiver of premium will last until:

• You’re able to return to work
• You no longer meet your provider’s criteria
• Your life insurance policy has ended
• You’ve reached retirement age

Is waiver of premium worth it?

A waiver of premium can be worth it, particularly if you’d struggle to keep up with your life insurance premiums if you were unable to work. With your life insurance payments put on hold, you can focus on paying your mortgage or rent, bills and other living expenses. 

If you would struggle to pay your usual expenses even with a waiver of premium in place, you may benefit from other types of insurance, such as income protection, mortgage protection or critical illness cover. Some people choose to have multiple different types of cover so that they’re protected from a number of possibilities, others are better suited to just one type of coverage.