Review of Waiver of Premium Riders

LGilmore

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Right now I am experiencing first hand what it is like to max your deductible, co-insurance and hit your stop loss on health insurance. Have both OHE and Individual DI kick in and look at having waiver of premium begin on my life insurance policies. I am currently in a wheelchair, cannot drive, cannot walk, cannot climb stairs, can't bathe without assistance, can't visit clients or attempt to gain new ones.

But, when NYL asked me in writing in determining if I meet the definition of disability for my life policies, the realization that they will honor that rider can down to a crashing halt. Can you do "any occupation?" was the question.

Well I can type and I can talk on the phone, so in today's world according to those words in that question, I am able bodied. So what short of dead, will answer that question in today's modern world?

There has quickly become the realization that all those years where I have sold waiver of premium on life policies has been a farce. Steven Hawking does not meet this definition of disability on these life policies. And I am not talking about el cheapo fly by night insurance company, I am talking about one of the cornerstones of the industry.

I sold a useless rider for these last 26 years. Am I just mad? yes. Mad that I was fooled into believing how important wavier of premium was for a policyholder.

Well, as time advances and technology improves hitting the definition of "any occupation" makes this a useless rider.

And no, it was not "any occupation based on education, blah blah blah. It was "any occupation" followed by a question mark.

Both my DI policies have come through, both consider me totally disabled right now. I hope to get better and am working hard on it, but I thought I would share this with other agents and maybe they can review what adding that rider actually does for a policy holder?

Maybe ask your carriers for some examples of when they would activate the rider?

Food for thought. Been thinking about this for a while. I put these on my own policies because I was taught how important that was. Well, real life happens and time has really made that rider obsolete except in the most dire cases.
 
First, I'm sorry that you're going through this hell right now.

I'm going to ask a question that may sound elementary, but I'm curious: what does your POLICY say about the disability waiver of premium?

It *could* be that NYL is limiting the language in the letter while your policy may say something else?

Sounds like if you had a LTC (or chronic illness rider) that you would qualify for benefits paid - especially if they were cash-based benefits.

Just for reference, ANICO's waiver of premium states:
- must prevent the insured from engaging in any gainful employment or occupation for which the insured is or becomes qualified for, by reason of education, training or experience.

http://img.anicoweb.com/cs/groups/p...ts/webcontent/10695_riders_benefits_guide.pdf
 
Right now I am experiencing first hand what it is like to max your deductible, co-insurance and hit your stop loss on health insurance. Have both OHE and Individual DI kick in and look at having waiver of premium begin on my life insurance policies. I am currently in a wheelchair, cannot drive, cannot walk, cannot climb stairs, can't bathe without assistance, can't visit clients or attempt to gain new ones.

But, when NYL asked me in writing in determining if I meet the definition of disability for my life policies, the realization that they will honor that rider can down to a crashing halt. Can you do "any occupation?" was the question.

Well I can type and I can talk on the phone, so in today's world according to those words in that question, I am able bodied. So what short of dead, will answer that question in today's modern world?

There has quickly become the realization that all those years where I have sold waiver of premium on life policies has been a farce. Steven Hawking does not meet this definition of disability on these life policies. And I am not talking about el cheapo fly by night insurance company, I am talking about one of the cornerstones of the industry.

I sold a useless rider for these last 26 years. Am I just mad? yes. Mad that I was fooled into believing how important wavier of premium was for a policyholder.

Well, as time advances and technology improves hitting the definition of "any occupation" makes this a useless rider.

And no, it was not "any occupation based on education, blah blah blah. It was "any occupation" followed by a question mark.

Both my DI policies have come through, both consider me totally disabled right now. I hope to get better and am working hard on it, but I thought I would share this with other agents and maybe they can review what adding that rider actually does for a policy holder?

Maybe ask your carriers for some examples of when they would activate the rider?

Food for thought. Been thinking about this for a while. I put these on my own policies because I was taught how important that was. Well, real life happens and time has really made that rider obsolete except in the most dire cases.

Thanks for sharing this story.

I've long been of the opinion that waiver of premium can be pretty useless. There are some companies with products that have own-occ disability waivers but most of them last for only a couple of years.

Most of the cases we work on exceed the company maximum on waiver benefit. In some cases I've issued policies with partial coverage on what the company will allow and in many others I opt to ignore it.

Interestingly, the majority of clients we've met in the last few years tell me to ignore waiver since they have quite sufficient disability coverage and don't really see the need for waiver.
 
I don't think you have to worry. Explain to them you cannot drive and thus can't get to any job.
NYL is a great company but if your claim gets denied I would talk to an attorney.

Good luck
 
There is a town I sell in that everyone that is on disability (half the population because it's in KY) has an old Prudential policy and the premiums have been paid for years on the disability waiver rider. I've even dealt with a 50 year old lady who has been mentally disabled her entire life and her policy has been paid on that rider for over 30-years.

I think they must have had a rogue agent back in the 1970s writing them some bad business.
 
Whether or not NYL will "probably pay the claim or get a lawyer" is not the point to me. I too use that rider and frankly never thought to look at the actual language. The point of the language is to not rely on any companies discretion because you know how that will go.

I hope that DI gets paid. Going forward I will be sure to disclose the terms of the DI rider and importantly if I don't know the terms I will tell the client. If I need a side letter I'll do it.
 
There is a town I sell in that everyone that is on disability (half the population because it's in KY) has an old Prudential policy and the premiums have been paid for years on the disability waiver rider. I've even dealt with a 50 year old lady who has been mentally disabled her entire life and her policy has been paid on that rider for over 30-years. I think they must have had a rogue agent back in the 1970s writing them some bad business.

I'm confused? Is the premium being paid by Prudential or not?
 
The waiver language in most policies I place is a 2-year own occ followed by the standard "any occupation based on education, experience, etc". No question a WP isn't going to have the same language as a non-can DI policy. I make it a practice not to over-sell the rider beyond what it actually says, but I have had far more clients use the WP than have died.
 
Larry,
Sometimes, Any-Occ language says something to the extent about "any job that is reasonable considering your education, background, & experience". So that can help. You certainly need to find the original contract and read the definition yourself.


I have often found the WP Rider fairly useless since most all use Any-Occ. I usually do not sell it.

Guardian's WP has a 5 year Own-Occ provision, so I do like theirs. I think that ON & Mass have Own-Occ for 2 years.
 

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