The waiver of premium does NOT include which provision? All future premiums are waived if the insured recovers from the disability If the insured qualifies, the premiums are waived retroactively to the beginning of the disability The waiver of premium generally does not extend past the insured’s age 60 or 65 The insured must be disabled for a set period of time before benefits begin
The Correct answer and Explanation is:
The correct answer to the question is: All future premiums are waived if the insured recovers from the disability.
Explanation:
The waiver of premium provision in an insurance policy is designed to protect policyholders who become disabled and are unable to work, thus preventing them from paying premiums during their disability. This provision generally has several stipulations that govern how and when premiums are waived, and it is important to understand these in the context of the options presented.
- Future Premiums Waived Upon Recovery: The statement “All future premiums are waived if the insured recovers from the disability” is misleading. The waiver of premium benefits is specifically designed to assist the insured while they are disabled. Once the insured recovers and is no longer disabled, they are expected to resume premium payments. Thus, if the insured recovers from their disability, premiums would not be waived; rather, they would need to continue making payments to keep the policy active.
- Retroactive Waiver of Premiums: If the insured qualifies for the waiver of premium provision, premiums are often waived retroactively to the start of the disability. This is a common feature that helps ease the financial burden during the period of incapacity.
- Age Limit on Waiver: Typically, the waiver of premium provision has an age limitation, often ending when the insured reaches age 60 or 65. This provision serves to limit the insurer’s exposure, as the likelihood of disabilities increases with age.
- Waiting Period for Disability: Insured individuals often must be disabled for a specific waiting period before the waiver of premium benefits begin. This means that the insurer has a defined period during which they will not waive premiums despite the insured’s disability.
In conclusion, the waiver of premium provision serves to provide financial relief for those unable to work due to disability, but it does not extend benefits in a way that waives premiums indefinitely after recovery, making the first statement the correct choice.