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Summary

A Disability Waiver of Premium provision in a life insurance policy provides that the life insurance will continue in effect, but that premiums are no longer payable, during the period that you, the insured, are disabled.

The five steps for applying apply for a disability Waiver of Premium are:

Step 1. Check your policy to determine if you have a disability waiver of premium provision.   
Step 2. Review the details of the waiver of premium provision
Step 3. Before proceeding with applying for the waiver, consider a few words of caution if you have a group policy and are considering a sale of your policy for cash or if your policy is less than two years old. In any event, there is no reason to disclose your health condition when making initial inquiries.   
Step 4. Complete the disability waiver of premium application.   
Step 5. The insurance company will evaluate your application for waiver.

Keep paying the premiums until the waiver is approved.

  • Under no circumstances should you ignore any premium that becomes due during the process of applying for waiver.
  • Unless, and until you have been notified in writing by the plan administrator or the insurance company that you no longer have to pay premiums, it is your responsibility to make sure that the policy stays in force.
  • If you are unable to make a premium payment that comes due during the application process, utilize all of your available resources to keep the policy in force. Don't forget to consider friends or family as possible sources of short term help. You may also contact a disease specific non-profit organization in your area to see if they can be of assistance.
  • Remember a life insurance policy can be a tremendous asset after your diagnosis!

Keep in mind that you may periodically be required to provide proof of your continued disability in order to continue to receive the benefit of the waiver. The life insurance company check-up can be done by mail or by sending an investigator.

  • By mail.
    • A check-up by mail is usually done on an annual basis.
    • You will likely have to complete a short form and your doctor may need to provide updated information as well.
    • Do not ignore this requirement. Failure to comply with insurance company rules or regulations regarding your policy could result in a cancellation of the waiver and a loss of coverage.
    • If you receive a notice asking for proof of your continued disability, follow the same procedure described in Step 4. Complete the Disability Waiver of Premium Application.
  • An investigator
    • Although it is unlikely, an insurance company may send an investigator to interview you to determine if you are still disabled.
    • "Just in case" an investigator shows up unexpectedly, at least skim What To Do If An Investigator Shows Up.

Step 1. Check your policy to determine if you have a disability waiver of premium provision.

If you have an individual policy

The disability waiver of premium provision would be described either in the policy itself or in an attached policy amendment ("rider"). If you've lost your policy, contact the insurance company and request a full duplicate copy of your policy. You don't have to indicate a reason for this request.

If you have group coverage through an employer or other organization

Read your certificate of coverage to look for provisions relating to "disability."

If you do not have a certificate, contact the policy administrator and ask for one. Consider asking for a complete copy of the policy. You have a legal right to one! You don't have to indicate the reason for your request. It is sufficient to indicate that you simply wish to review the details of your coverage.

Often an employer or group administrator will indicate that you have sufficient information regarding your coverage, because they don't want to be bothered by your request. Don't buy this line. Keep pushing until you receive full documentation.

If it seems as though you are going to have difficulty obtaining documentation about your coverage, put your request for a certificate or copy of the policy in writing. Requests in writing get attention. Also keep detailed notes of any conversations that you have with your employer, the policy administrator, or the insurance company. Be sure to include the date and time of any conversations, as well as the name of the individual(s) that you speak with. Keep these notes with your life insurance file(s).

With group coverage through an employer, there is often a requirement for the employer to notify you of your right to the waiver of premium. If you have been on disability for a period of time and you lost your insurance coverage because you were not notified of your rights, you may be able to have your coverage reinstated. If necessary, contact the insurance department in your state for assistance. See: www.naic.org/state_web_map.htm offsite link.

Step 2. Review the details of the waiver of premium provision.

Pay careful attention to any time deadlines indicated for applying for the waiver.

Carefully read any language in the policy or certificate that defines "disability" for the purposes of the waiver to determine whether you qualify.

If you aren't sure whether you qualify, speak with a lawyer, your union, or a local disease specific not-for-profit organization.

As a general matter, you likely qualify for a waiver of premium if:

  • You are approved by your employer to qualify for long term disability, or
  • You are determined by Social Security to qualify for Social Security Disability Insurance or Supplemental Security Income due to your health condition.

Step 3. Before proceeding with applying for the waiver, consider a few words of caution

If you have group coverage and you are considering a sale of your policy for cash (a "viatical settlement"), it can be beneficial to have the policy reviewed by a reputable broker or purchasing company prior to applying for the waiver. There are times when activating a waiver of premium provision can prevent a sale from taking place in the future due to the provisions of the group policy. To learn more, see Alternatives For Obtaining Money From A Life Insurance Policy.

If your policy or coverage is less than two years old, exercise caution when applying for the waiver. During the first two years of most policies, the insurance company that issues the policy has a right to contest the validity. The insurer cannot do this on a whim, however.

If your policy is less than two years old, review the application for the coverage to make sure that all of the information you provided in order to obtain the coverage was accurate. In other words, be sure the insurance company would not have a reason to contest the validity of the policy before you request information apply for a waiver of premium.

During your initial inquiries with the insurance company or your employer, it may be wise not to disclose information about your health condition, since it really isn't relevant. You may be asked about your condition or your diagnosis, but more than likely it is because the individual you are speaking with is nosy, or fishing around for information that they don't need. If you are asked about your health condition, you can politely respond that you don't wish to discuss it.

Step 4. Complete the disability waiver of premium application.

If your policy is an individual policy

  • Complete as much of the application as you can. Make a copy "just in case." Send or take the form to your doctor to complete the medical provisions.
  • Find out how long it will take the doctor to complete the form. Set alerts on your computer or note it in your calendar. Start following up if you haven't received the form by the date specified.
  • Review the completed form, including the doctor's statements, to be sure everything is completed as desired. If the doctor included information about prognosis or life expectancy, keep in mind that life expectancy is about statistics, and doesn't begin to let us know what will happen in the future -- much less with any particular individual. Life expectancy (unless you are at an end stage) is about what has happened in the past, not what will happen with the new drugs and treatments that are constantly coming on the market.

Keep in mind that the doctor is trying to help you and is likely indicating a life expectancy as short as he or she can for the purpose of helping you obtain this benefit.

  • Make a copy of the form for your files.
  • You can submit the form as is without a cover letter. However, it is preferable to send it to the insurance company with a letter that references your policy number and states that you are requesting activation of the disability waiver of premium. Ask that your request be attended to as soon as possible. Tell the insurer to call you if there are any questions. Be sure to provide a phone number at which you can be reached during business hours.
  • Submit all documentation via certified mail or similar means which will permit you to trace it and to prove that it was received. This way you will have the necessary documentation to prove when the insurance company received your paperwork.
  • Follow-up with the insurance company periodically to find out the status of your application. We recommend that you follow up a day or so after you send your information to confirm its receipt -- even if you already know it was received because you track it through the carrier. At this time, ask how long it will take to process. You should then set alerts to follow-up. Call at least once a week to find out the status of your application until it has been processed.

If you have group coverage

  • Call the insurance company and ask for an application for the disability waiver of premium benefit. Don't be surprised if the insurance company tells you that you have to obtain the application from your group. If this is the case, ask the administrator at your group for the application. If you have your insurance through work, and you haven't previously disclosed your condition, read Disclosing your Condition To Your Employer. You do not have to tell your employer more about your condition at this point than you want to. Keep in mind that you may not be protected against discrimination as a result of your condition unless you formally make a disclosure for that purpose to your employer. To learn more, see Rights At Work.
  • If there is a part of the form that has to be completed by you're the group, give the form to the group to complete that section. Ask that the completed form be returned to you. Find out how long it will take to complete the form and set alerts in your computer or make a note in your calendar to follow up.
  • When you have the form back, check the group's statements for accuracy. Then complete your section.
  • Make a copy of the form "just in case" and send or take it to your doctor Find out how long it will take the doctor to complete the form, set alerts to follow up. Start following up if you haven't received the form by the date noted.
  • Review the completed form, including the doctor's statements, to be sure everything is completed as desired. If the doctor's form includes information about prognosis or life expectancy, keep in mind that life expectancy is about statistics, and doesn't begin to let us know what will happen with any particular individual. Likewise, it is about what has happened in the past, not what will happen with the new drugs and treatments that are coming on the market on a frequent basis.

Keep in mind that the doctor is trying to help you. It is likely that he or she will indicate a life expectancy as short as he or she arguably can for the purpose of helping you obtain this benefit.

  • Make a copy of the form for your files. You can submit it to the insurance company as is. However, it is preferable to send it to the insurance company with a letter that references your policy number and states that you are requesting activation of the disability waiver of premium provision. Ask that your request be attended to as soon as possible. Tell the company to call you if there are any questions. Be sure to provide a phone number at which you can be reached during business hours.
  • Submit all documentation via certified mail or similar means which will permit you to trace it and to prove that it was received. This way you will have the necessary documentation to prove when the insurance company received your paperwork.
  • Follow-up with the insurance company periodically to find out the status of your application. We recommend that you follow up a day or so after you send your information to confirm its receipt -- even if you already know it was received because you track it through the carrier. At this time, ask how long it will take to process. You should then set alerts to follow-up. Call at least once a week to find out the status of your application until it has been processed.

Step 5. The insurance company will evaluate your application for waiver

After the process is complete, the insurance company will send you a letter of approval or denial.