An insured individual purchases a disability policy with a waiver of premium rider on January 1. The individual is disabled on June 1. On July 1, he receives proof of permanent and total disability, and submits a claim. He begins receiving benefits on July 15. When are his premiums waived?

Rationale

The premiums are waived starting from June 1.

The waiver of premium rider becomes effective when the insured individual is declared disabled. In this case, the individual becomes disabled on June 1, which triggers the start of the premium waiver.

A (01-Jan) YOUR ANSWER

The waiver of premium cannot begin from January 1 because the individual had not yet experienced any disability. The effective date of the waiver corresponds to when the individual becomes disabled, which is June 1.

B (01-Jun) CORRECT

This choice is correct as it aligns with the date the individual became disabled. The waiver of premium is applied from the onset of the disability, and thus premiums are waived starting from June 1.

C (01-Jul) YOUR ANSWER

Choosing July 1 is incorrect because this date reflects the submission of proof of disability, not the date the disability itself began. The waiver of premium is retroactive to the date of disability, which is June 1.

D (15-Jul) YOUR ANSWER

This option is incorrect as it suggests the waiver starts on the date benefits are received. However, the waiver of premium is effective from the date the individual is declared disabled, which is June 1, not when benefits begin on July 15.

Conclusion

The waiver of premium rider becomes effective from the date the insured individual is declared disabled, which in this scenario is June 1. This means that premiums are waived from that date, regardless of when the claim is submitted or benefits are received. Understanding the timing of the waiver is crucial for accurately navigating disability insurance policies.

An insured individual purchases a disability policy with a waiver of premium rider on January 1. The individual is disabled on June 1. On July 1, he receives proof of permanent and total disability, and submits a claim. He begins receiving benefits on July 15. When are his premiums waived?

The premiums are waived starting from June 1.

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