DEFINITION of 'Waiver Of Premium For Payer Benefit '
A clause in an insurance policy that says that the insurance company will not require the insured to pay a fee to maintain the policy under certain conditions. Most commonly, these conditions are the death or disability of the person paying the insurance premiums. The insurance company may charge a higher premium to include this waiver in the policy to compensate for the additional risks presented with a waiver of premium for payer benefit.
BREAKING DOWN 'Waiver Of Premium For Payer Benefit '
For example, if a parent or grandparent purchased a life insurance policy for their child or grandchild, the policy might contain a waiver of premium so that the child would continue to be covered even if the parent or grandparent died or became disabled and was no longer able to pay the premiums. The waiver might only apply until the child reached an age where he or she could be expected to pay the premiums alone, such as age 21.