Insurers must have Waiver of Premium benefit in offering

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With the competitive pressure on insurers these days, there can be no justification for an insurer to not have a Disability Waiver of Premium benefit in offering.

Wednesday, October 29th 2008, 10:49AM

by Graeme Lindsay

This cover provides that if the insured is disabled through illness or injury for longer than a qualifying period, (four, eight, 13 weeks), then premiums on the whole policy are waived for the time you remain so disabled, or to age 65.

Most income protection contracts automatically include Disability Waiver of Premium, and the others offer it as an optional benefit.

Points to watch are:

• Is the premium waived on the whole contract, or only on the income protection component?
• Are premiums waived on all lives insured in the contract, or only on one life?

I suggest that there can be no justification, in a family insurance planning scenario, for the adviser to not offer such a benefit. The premium is usually minute, and the potential benefit enormous.

Are you recommending Disability Waiver of Premium in all family insurance plans you complete?

Graeme Lindsay runs Strategy Financial which provides research to advisers on insurance products. The comments in "Strategy Thoughts" outlines his view on recent product and policy changes.

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