What is Premium Protection
In most life insurance policies,
policyholders are able to include what
is known as premium protection.
Premium protection or waiver of
premium, as it is known in some countries,
is a concept used in the insurance industry
to protect the payment of premium by a
policyholder, due to an unforeseen event
that will disable the policyholder and
prevent them from making premium
payments.
This benefit is mostly available on
life insurance policies and is dependent
on the health and/or occupation of the
policyholder.
Note
Premium protection does not cover
dismissal or firing from employment,
additionally it only covers payment for the
life insurance itself and does not pay for
additional expenditures such as mortgage,
car payments or any other expenditure
How Does it Work?
In the event that a policyholder is unable
to pay for a premium, for example, because
of a negative health (prolonged illness,
disability, etc.) or occupational (injury)
event, the insurer will continue to pay for
the policy on behalf of the policyholder.
Additionally, if a policyholder is
responsible for paying someone else’s risk
cover and the policyholder dies or becomes
disabled and is unable to pay the premium,
the insurer will continue to pay the premium
to ensure that the cover continues.
Even though it differs from insurer to
insurer, you may generally protect your
premium from 18 to 70 years of age.
Advantages of Premium Protection
If the protected benefit has increasing
premiums in the future, the insurer will
continue to pay the full premium.
There is no limit to the amount of cover
you can protect. You can protect your
premium on any lump sum benefit.
Factors That May Affect Your Eligibility
for Premium Protection
Any family history of chronic and other
diseases negatively affect your instalment
and/or eligibility. Bad habits such as
smoking and excessive alcohol intake
also have an impact on your instalment
and/or eligibility. Your physical condition
matters; i.e. a BMI of greater than 35 might
negatively affect your instalment.
Factors That May Affect Your Eligibility
Your eligibility and premium for this benefit may be impacted by the following:
- Health history: A family history of chronic illness may increase premiums or limit eligibility.
- Lifestyle habits: Smoking and excessive alcohol consumption negatively affect eligibility.
- Physical health: A BMI over 35 could result in higher premiums or reduced access to this benefit.
Premium protection is a valuable feature that offers peace of mind, ensuring your life insurance remains in force even if life takes an unexpected turn. Speak to your insurer or financial advisor to find out if this benefit is right for you
- Health history: A family history of chronic illness may increase premiums or limit eligibility.
- Lifestyle habits: Smoking and excessive alcohol consumption negatively affect eligibility.
- Physical health: A BMI over 35 could result in higher premiums or reduced access to this benefit.
Premium protection is a valuable feature that offers peace of mind, ensuring your life insurance remains in force even if life takes an unexpected turn. Speak to your insurer or financial advisor to find out if this benefit is right for you