Life insurance is a common perk included in an employee benefits package. These policies are called group life insurance policies and they are single life insurance policies that cover a group of people, like co-workers. There are many additional benefits to these life insurance policies, like the premiums for these group life insurance policies are usually less expensive than stand-alone individual life insurance policies. Another benefit of group life insurance policies is something called a “waiver of premium” provision.
A waiver of premium provision allows an employee that applied for that benefit under the group life insurance policy to keep their life insurance coverage if they become seriously injured, gravely ill, or completely disabled. This waiver of premium coverage will be at a level the employee would have had before becoming disabled and will be at no cost to the employee. While this all seems fantastic, there are certain steps and requirements that the employee must satisfy before qualifying for the waiver of premium benefit.
Many life insurance plans that include a waiver of premium provision require some sort of proof that the employee is completely disabled, including certification from a doctor. Life insurance policies with a waiver of premium provisions also often require proof that:
● The disability arose from disease or injury caused by an accident;
● The disability prevented the employee from being able to work;
● The disability occurred before the employee reached sixty years of age;
● The disability continued for a period of time identified by the waiver of the premium provision in the life insurance policy before the employee applied for the waiver of premium benefit (this period can be different depending on the life insurance policy and provision).
Life insurance benefits under the waiver of premium are not automatic, however. The insured employee must apply for the benefit and they must provide proof of a qualifying disability that meets the requirements according to the provision in the life insurance policy. Also, the waiver of premium benefits does not last forever. Typically, the waiver of premium benefit stops when the employee retires or reaches seventy years of age.
It is also important to understand that life insurance companies may deny a claim under the waiver of premium benefit. Applying and qualifying for a waiver of premium benefit requires that the disabled employee turn in a lot of documents. If the employee fails to properly and timely submit the required documents or simply does not have enough time to submit all of the required documents, the life insurance company may deny a claim. Additionally, employers may have not provided an employee or their family with correct or enough information. This can also result in a denial of a life insurance claim if the employee or their family unknowingly relied on incorrect information from the employee’s employer. An employer may also fail to turn in required documents for the employee. This may also result in a denied life insurance claim.
Group life insurance policies come with many benefits. One of the added benefits is the wavier of premium provision which allows the insured employee to maintain their life insurance coverage if the employee becomes unable to continue working. However, to receive the benefit of the waiver of claim provision, the insured employee must qualify and properly apply. Because qualifying for the waiver of premium requires additional effort, the insured employee and their beneficiaries must understand the waiver of premium provision.