Understanding a premium waiver on life insurance

Published on June 15th, 2020
  Written by 
Bill Tsouvalas
Bill Tsouvalas is the managing director and a key company spokesperson at Savvy. As a personal finance expert, he often shares his insights on a range of topics, being featured on leading news outlets including News Corp publications such as the Daily Telegraph and Herald Sun, Fairfax Media publications such as the Australian Financial Review, the Seven Network and more. Bill has over 15 years of experience working in the finance industry and founded Savvy in 2010 with a vision to provide affordable and accessible finance options to all Australians. He has built Savvy from a small asset finance brokerage into a financial comparison website which now attracts close to 2 million Aussies per year and was included in the BRW’s Fast 100 in 2015 as one of the fastest-growing companies in the country. He’s passionate about helping Australians make financially savvy decisions and reviews content across the brand to ensure its accuracy. You can follow Bill on LinkedIn.
Our authors

Fact checked

At Savvy, we are committed to providing accurate information. Our content undergoes a rigorous process of fact-checking before it is published. Learn more about our editorial policy.
Premium waver on life insurance

At Savvy, our mission is to empower you to make informed financial choices. While we maintain stringent editorial standards, this article may include mentions of products offered by our partners. Here’s how we generate income.

Life insurance can be a financial safety net that can protect you and your loved ones. Paying your premiums on time can prevent your policy from becoming void. What happens when you sustain a critical injury or fall ill which stops you from earning an income? Will you still have to pay your premiums? Here is what you need to know when it comes to having your premiums waived.

What is a premium waiver?

Life insurance policies come with a range of features that can be adjusted to suit your lifestyle to ensure that you are adequately covered. Having your premiums waived basically means that your insurer will not have to pay your policy premiums during the period in which you have sustained a critical injury or illness. It can also be applicable in the case where you become unexpectedly disabled that prevents you from working. Therefore, resulting in you being unable to pay off your monthly premiums.

When will it be applicable to you?

Insurers have different definitions of what it means to be disabled or to be ill in order to effectively add the premium waver to your policy. Therefore, you will have to check your policy in the product disclosure statement or speak to your insurer to check if it is applicable to your situation. A waiver can be applicable to you if you

Will this automatically be added to my policy?

  • Disability: If you find yourself unable to work due to suffering a disability for an extended period of time, you can get your premiums waived. Most insurers define disability as not being able to perform a certain number of daily living activities. You may not be eligible if you have sustained an injury that has resulted in your disability from a high-risk manual occupation.
  • Being involuntary unemployed: This is applicable if you are unable to work for three consecutive months. Your insurer will request that you provide proof that shows this. They are also most likely going to add this waiver if you have also held your policy for more than 6 months.

This is a life insurance feature that you can choose to have added to your life insurance policy. This could come with an increased premium to provide adequate cover in the event when you are unable to pay off your premiums. This is why it is vital that you check the product disclosure statement (PDS) to see if this feature is available.

Other considerations

Having adequate cover can give anyone peace of mind. A premium waiver is just one of those handy features that can do this for you when things take an unexpected turn. Remember to inform your insurer as soon as possible if you find yourself in a predicament where you will not be able to meet the monthly payments on your policy to avoid having it becoming void.

Did you find this page helpful?

Thanks for your feedback!

This guide provides general information and does not consider your individual needs, finances or objectives. We do not make any recommendation or suggestion about which product is best for you based on your specific situation and we do not compare all companies in the market, or all products offered by all companies. It’s always important to consider whether professional financial, legal or taxation advice is appropriate for you before choosing or purchasing a financial product.

The content on our website is produced by experts in the field of finance and reviewed as part of our editorial guidelines. We endeavour to keep all information across our site updated with accurate information.

In this article

Share this article

Share on facebook
Share on twitter
Share on linkedin
Share on email
Share on pinterest

Looking for a car insurance?

Savvy is partnered with Compare the Market to help you compare a range of car insurance policies from a panel of trusted providers.

* Terms and conditions and lending criteria apply.

Smart money saving tips

Subscribe to our newsletter.

By subscribing you agree to our privacy policy

Related articles

Premium waver on life insurance

We'd love to chat, how can we help?

By clicking "Submit", you agree to be contacted by a Savvy broker and to receive communications from Savvy which you can unsubscribe from at any time. Read our Privacy Policy.