Waiver of Premium
A waiver of premium is a feature or rider that excuses you from paying premiums if you become unable to work due to illness or injury, while keeping the policy's cover fully in force. Premiums are typically waived after a waiting period (the deferred period) and continue to be waived for as long as the disability continues.
How waiver of premium works
When you make a waiver of premium claim, the insurer agrees to pay your premiums on your behalf — so the policy stays active without cost to you. You continue to hold the full benefit of the underlying policy:
- On a life policy: your beneficiaries can still claim the sum assured if you die
- On a critical illness policy: the lump-sum benefit is still payable on diagnosis
- On an income protection policy: the monthly benefit continues alongside the waiver
Most waiver riders include a deferred period — a waiting time before the waiver activates, commonly three to six months of continuous disability. This aligns with the length of time most employers continue to pay sick pay, so the waiver kicks in when income actually stops.
How "unable to work" is defined
The definition of disability used to trigger the waiver matters significantly. The two most common definitions are:
The waiver's disability definition should be checked alongside the underlying policy's definition — they may differ. Look in the definitions and exclusions sections of the policy document.
Waiver of premium FAQ
Frequently asked questions
- The waiver typically continues for as long as you remain unable to work as defined by the policy — up to the policy's expiry date. Some policies have a maximum waiver duration (for example, two years per claim); others continue indefinitely while disability continues. Check the policy conditions for the exact trigger definition, the deferred period, and the maximum duration.
- No. Waiver of premium suspends your obligation to pay premiums while keeping the underlying cover in force. It does not pay a benefit itself — it simply keeps the policy alive so that the main benefit (sum assured, income, or other cover) remains available to be claimed. Think of it as cover for the premium, not cover that pays in addition to the policy benefit.
- For long-term policies like life insurance and critical illness cover, waiver of premium is generally considered good value. If a serious illness or accident prevents you from working, losing your life cover at that point — when you may be uninsurable elsewhere — is a significant financial risk. The premium for the waiver rider is usually modest (often 5–10% of the base premium). If you already have income protection insurance that would cover your premiums, the waiver adds less incremental value.