What is a waiver of premium rider?

A waiver of premium rider is a provision included in a life insurance policy that allows the policyholder to stop making premium payments if they become disabled. This rider ensures that the insurance coverage remains in force even when the insured is unable to work and pay bills due to a disability. The intent behind this feature is to protect the policyholder's insurance coverage during times of financial hardship caused by their inability to earn income.

In the context of life insurance, maintaining coverage while facing a disability is crucial because it ensures that the insured or their beneficiaries are protected against the risk of losing the policy. This rider is valuable for individuals concerned about their financial stability in the event of unexpected health issues that could prevent them from earning an income.

The other choices do not accurately describe the waiver of premium rider. The option concerning benefits for skipping payments during financial hardship might seem related but typically relates to broader provisions in some policies not specific to disability. The clause regarding reducing premiums based on age and the feature that increases premiums based on risk assessments pertain to adjustments made in policy costs rather than the specific waiver of premium for disability.