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Life Insurance Disability Waiver versus Disability Insurance
The Life Insurance Disability Waiver is a rider which can be added to most Term Life or Permanent life insurance policies. Generally, the Disability Waiver option waives the insurance premium in the event that the applicant becomes disabled.
There are three caveats with the Disability Waiver rider:
1. The amount of coverage is limited to only waiving the life insurance premium. In some instances, this may only be $20.00 or $30.00 a month.
2. The coverage generally has a four to six month waiting period. Meaning that the applicant will have to wait 4 to 6 months until his or her premium is waived.
3. The definition of disability changes to 'Any Occupation' after two years. Under this definition, total disability means the inability to work at any occupation. Therefore, if you are a computer consultant and your disability prevents you from performing your regular occupational duties, but you can still gainfully work at another occupation - You will not receive a cent!
Traditional disability insurance is not tied to a life insurance policy and applicants can usually qualify for anywhere between 50% to 70% of their net income. Professionals can get plans with a 'Regular Occupation' definition throughout the length of the contract. Under this definition, total disability means the inability to work at your regular occupation due to injury or illness. The premiums on traditional disability policies are also usually more favorable on a cost per $100.00 of monthly indemnity ratio.
One instance where Disability Waiver Riders may make sense is, where the applicant would have a hard time qualifying for traditional disability insurance due to occupational and/or health related issues.
For more details, you can contact us at a 1-866-899-4849, or you can visit our Online Disability Quote Page.
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I was diagnosed with MS as of 2008. I was unaware that my whole life policy has the disability waiver attached to it, where I would not have to pay the monthly premium. I need to know what is the procedure I have to follow to have this in effect.
What forms are required for me to have sent to The Co-operators to have filled out? What address do these forms need to be sent to?. I would greatly appreciate a response as soon as possible. The branch of the Co-operators that I deal with now is in Midland, Ontario.
Sincerely,
Diane D
Thanks for the note Diane. You would have to contact he Co-operators or your agent directly. They will let you know the form that needs to be compaleted and where it must be sent. There will likely be a form for you and your doctor to complete.