What is a Waiver of Premium for Disability for Health Insurance?
When someone is disabled, her disability income only may be a percentage of what she made before the disability. The waiver of premium for disability for health insurance pays the health insurance premium in this instance. This would be a must, since health insurance is most needed when someone is injured or disabled.
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Waiver of Premium
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The waiver of premium for disability is a rider or "attachment" to the health insurance policy. Its purpose is to provide for health insurance premiums to be paid if the insured is disabled and unable to earn and make payments. Since the rider adds additional cost to the health insurance policy, the rider is made available to the insured as an option. However, because of the need to have health insurance during a period of disability or injury, most insurance companies highly recommend it.
How It Works
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The cost associated with the waiver premium is added to the monthly premium paid by the insured. Upon disability, the health insurance premiums are waived once the insured meets the "verification" and/or "waiting period" required by the insurance company. Verification or proof of disability is required, generally from a doctor. The proof of disability is then followed by a waiting period. The waiting people is required to prove the disability is not short-term. The waiting period varies per company, but it generally ranges from three to six months. Upon meeting these two requirements, the health insurance premium is waived for a period determined by the insurance contract.
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Advantages
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The waiver of premium for disability rider helps provide peace of mind for the insured, knowing that a piece of the "financial stability" puzzle is covered if he is disabled and unable to work. Having health insurance during a period of disability helps provide financial stability and meeting of financial goals.
Disadvantages
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Waiver of premium represents a significant increase in the cost of health insurance for older individuals. This is because the probability of long-term disability increases with age. In addition, individuals in high-risk occupations may not qualify for the waiver of premium for disability rider, or the cost may be prohibitive for such occupations.
Best Practice
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Upon evaluating health insurance and waiver of premium options, individuals should evaluate the quality of their disability income options at work or with the state. This involves determining how much they will receive from disability income benefits and whether it will be adequate to cover living expenses and health insurance premiums. If so, maybe they can pass on the waiver of premium cost. and if not, they may want to invest in the waiver of premium option.
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References
- Photo Credit health centre sign. access to health centre image by L. Shat from Fotolia.com
