Many life insurance policies include a valuable provision known as the Disability Waiver of Premium. This rider offers significant benefits to policyholders by waiving the premium payments if they become totally disabled, while keeping their life insurance coverage active. The waiver is particularly important as it ensures that the insured’s policy remains in force without requiring them to pay premiums during a period of disability.
Once the policyholder provides sufficient evidence of disability, the waiver kicks in, and the policy continues as if premiums were being paid regularly. In most cases, the waiver is applied retroactively from the date of disability, and any premiums paid during that time are typically refunded.
Many individuals choose to add this rider to their life insurance policy for peace of mind, knowing they will not lose coverage due to inability to pay premiums during a disability. Additionally, benefits like the death benefit, dividends, and cash values typically remain unaffected by the waiver. Once the individual recovers from their disability, they resume making regular premium payments.
However, complications can arise when an insurance company denies a life insurance claim based on non-payment of premiums, while the insured believed the waiver was in effect. If the insurer asserts that the insured wasn’t totally disabled as per the policy definition, it’s crucial to consult with a skilled life insurance attorney to explore your legal options.
Defining Total Disability in Life Insurance Claims
In the context of the Disability Waiver of Premium, most insurance policies define total disability as the inability to perform the significant and essential duties of any occupation for which the individual is qualified, taking into account their education, training, or experience. This disability must result from an injury or illness.
Insurance companies often distinguish between two types of duties in this context:
Material duties: These are the essential tasks directly related to the occupation.
Substantial duties: These refer to the overall quantity and quality of the performance of key responsibilities associated with the occupation.
For example, consider Dennis, a car salesman at a dealership. His material duty involves engaging with customers to facilitate car sales. This is a primary, substantial duty of his job, and the expectations regarding the volume and quality of his work are clearly defined.
It’s important to note that the total disability definition for the Waiver of Premium may differ from the one used in Long-Term Disability (LTD) insurance policies, as it is specific to each individual contract.
Notice of Claim in Life Insurance Claims
Insurance companies typically require policyholders to file a notice of claim when they become disabled. This notice must usually be submitted within 12 months from the date the individual ceases to actively work—generally, this is the date the policyholder last physically worked or was present at their workplace.
It’s worth noting that many claims are denied due to issues with eligibility for the Waiver of Premium benefit or errors made in submitting the appropriate documentation. This can occur if the employer fails to submit required paperwork or the claim is made too late.
If your claim has been denied because of non-payment of premiums during a period where you believe the waiver should have been in effect, or if you are facing difficulties navigating this process, it’s crucial to seek assistance. A qualified life insurance lawyer can help you review the policy terms and fight for the benefits you deserve.
What to Do If Your Waiver of Premium Claim Is Denied
If you’ve encountered issues with a denied claim related to the Disability Waiver of Premium, it’s important to act quickly. A life insurance attorney with experience in handling disability-related claims can help you:
Review the terms of your life insurance policy
Assess whether your disability meets the policy’s definition of total disability
Investigate potential errors made during the claims process
Help you appeal a denied claim or file a lawsuit if necessary
Having a legal professional on your side can be instrumental in ensuring that you receive the benefits you're entitled to under your life insurance policy.