What does a waiver of premium rider do in the event of total disability?

A waiver of premium rider is a valuable provision in a life insurance or disability policy that ensures the policyholder's coverage continues uninterrupted in the event of total disability. When a person becomes totally disabled as defined by the terms of their insurance policy, this rider allows the insured to stop paying premiums without losing their benefits. Essentially, during the period of total disability, the insurer will waive the requirement for premium payments, allowing the policy to remain active and in force.

This rider is particularly important for policyholders who can face significant financial challenges during a disability. By eliminating the necessity to make premium payments, it helps ensure that the individual maintains their insurance coverage and the associated benefits, protecting the insured's loved ones and financial legacy.

Other choices like canceling the policy or refunding previous premiums do not accurately reflect the function of the waiver of premium rider. Increasing the coverage amount automatically does not pertain to this rider’s purpose, as its primary goal is to maintain the existing coverage during times when the policyholder is unable to continue premium payments due to their disability.