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Life insurance is a valuable financial asset designed with a death benefit to help protect you, your family and your business from unforeseen events. But what would happen to your coverage if you were to become too sick or injured to continue paying your premiums?

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Waiver of premium locks in protection

When you buy life insurance, consider including the Waiver of Premium rider.1 When elected, it keeps your protection in place by waiving premiums if you, as the insured, are unable to work due to injury or illness and are considered totally disabled. Additionally, even if you own disability income insurance and should become disabled, the benefits obtained from a life policy with Waiver of Premium could provide supplemental income2 after the disability policy benefits end.

The Waiver of Premium rider maintains your life insurance coverage while you are unable to work, freeing up cash flow for other critical needs. And, with a whole life policy, your cash value is guaranteed to grow.3,4 In this way, a whole life policy with Waiver of Premium can be a valuable financial asset.

How does it work?

If you should become total disabled5,6 before age 60 and continuously for at least six months:

  • Guardian will waive premiums due for as long as you remain disabled.

If total disability begins before age 60 and continues to age 65:

  • You will be considered disabled for life and any remaining premiums due will be waived.

If total disability begins on or after age 60, and before age 65:

  • Premiums will be waived until age 65 or for two years, whichever is longer.

If you qualify for benefits under the Waiver of Premium rider, Guardian also will refund any premiums, monthly deductions, or specified amounts you paid during the six-month waiting period.

Waiver of Premium rider costs are based on your age and underwriting class.

Living with a disability is more common than you think

Because people are living longer in general, many live with chronic or terminal illnesses for longer periods of time. According to recent statistics, more than one in four of today’s 20-year-olds can expect to be out of work for at least a year because of a disabling condition before they reach normal retirement age.7 Having life insurance in place helps protect a financial future for you and your heirs, and Waiver of Premium can help your policy remain in force if you’re unable to make premium payments due to illness or injury.

Check with your Guardian professional to find out about your specific situation and the benefits of including a Waiver of Premium when you purchase a policy!

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1 Waiver of Premium, Guaranteed Insurability and Applicant’s Waiver of Premium riders incur an additional premium. Premiums for the Waiver of Premium rider are payable until the insured’s age 65. A Waiver of Premium rider waives the obligation for the policyholder to pay further premiums should he or she become totally disabled continuously for at least six months. This rider will incur an additional cost. See policy contract for additional details and requirements.

2 Policy benefits are reduced by any outstanding loan or loan interest and/or withdrawals. Dividends, if any, are affected by policy loans and loan interest. Withdrawals above the cost basis may result in taxable ordinary income. If the policy lapses, or is surrendered, any outstanding loans considered gain in the policy may be subject to ordinary income taxes. If the policy is a Modified Endowment Contract (MEC), loans are treated like withdrawals, but as gain first, subject to ordinary income taxes. If the policy owner is under age 59½, any taxable withdrawal may also be subject to a 10% federal tax penalty.

3 All whole life insurance policy guarantees are subject to the timely payment of all required premiums and the claims paying ability of the issuing insurance company. Policy loans and withdrawals affect the guarantees by reducing the policy’s death benefit and cash values.

4 Some whole life polices do not have cash values in the first two years of the policy and don’t pay a dividend until the policy’s third year. Talk to your financial professional and refer to your individual whole life policy illustration for more information.

5 Claims beginning at ages 58 and 59 have a 6- and 5-year occupation period, respectively.

6 Definition of total disability:

- During the first seven full years from the date of disability, “total disability” means that the insured isn’t able to perform all of the duties of his or her regular occupation.

- After the first seven years from the date of disability, “total disability” means that the insured isn’t able to perform all of the duties of his or her occupation, or any other occupation for which he or she is suitable by either education or training.

- Until the insured’s 25th birthday, “occupation” includes attending school full-time outside the home.

- The insured will automatically be considered totally disabled upon the entire and irrevocable loss of sight in both eyes, or total and permanent loss of use of both hands or feet or of one hand and one foot.

7 https://disabilitycanhappen.org/disability-statistic/, Council for Disability Awareness

Rider Form Numbers: 01-R17, 18-WP WL, 18-AWP and 18-GIO.

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