Premium Waiver (Beitragsbefreiung)

Concept

A premium waiver is a supplementary benefit in life or disability income insurance under which the insurer, upon occurrence of a contractually defined event, particularly the policyholder’s disability, assumes the ongoing payment of premiums, without coverage or the entitlement to the agreed benefits lapsing.

Mechanism

If the contractually defined condition is met (usually a specific degree of disability lasting for a minimum period), the contract is internally treated as though premiums continued to be paid regularly, so that, for example, an endowment life insurance policy continues unreduced until maturity and the full maturity benefit becomes payable, without the policyholder actually having to pay premiums during the period of disability.

Relationship to Disability Income Benefits

A premium waiver is frequently offered as a standalone module alongside a disability income annuity or integrated into a combined disability supplementary policy; it ensures that the underlying retirement provision or death benefit protection remains intact even if disability occurs, regardless of the amount of any additionally agreed annuity payment.