Understanding Long-Term Disability Insurance Premium Waivers

What Is a Premium Waiver in Long-Term Disability Insurance?

Long-term disability insurance policies exist as a safety net for individuals if, through accident or illness, they become unable to perform their duties of employment. As with other types of insurance, in order to keep your policy in good standing premiums need to be paid on it, whether monthly or yearly.

But what happens when an insured is rendered disabled from work and unable to afford to pay their ongoing insurance premiums? The answer is a waiver of those premiums.

The Purpose and Benefits of Premium Waivers

A premium waiver is a clause within a long-term disability insurance policy that allows the insured party to stop paying premiums while still maintaining coverage. A premium waiver is typically triggered when the individual covered under the policy is found to have met the definition of disabled. Once the individual meets that threshold premiums under the policy are waived until they no longer meet the definition of disabled. This provides for those on long-term disability to maintain coverage under their insurance policy without having to pay the premiums. This is, of course, a great benefit for someone who is unable to work and earn income to meet those premium payments.

The wording of each specific long-term disability insurance policy will govern the applicability and scope of premium waivers. It is extremely important for policyholders to carefully review their insurance policy documents to understand the specific requirements and conditions relating to a premium waiver.

What Happens If My Insurance Company Denies My Long-Term Disability Claim?

The issue can arise when an insurance company denies a legitimate long-term disability claim or cuts off a long-term disability claim that had previously been approved. Unfortunately, there are many times when insurance companies deny legitimate long-term disability claims. While you can fight their decision with the help of an experienced long-term disability lawyer, if your insurance company has denied you meet the definition of disabled under your insurance policy, regardless of whether or not the denial is legitimate, your premium waiver will not be triggered and you will continue to owe premiums on your policy if you want to keep it in effect. This can be a massive burden to someone who is unable to work and almost certainly cannot afford to continue to pay premiums.

For group policies, usually when an insurance company denies long-term disability benefits, yet you remain off work, they will provide you with an opportunity to transfer your group policy to a private policy and pay the premiums yourself, to allow you the option of maintaining your coverage after your long-term disability claim has been denied.

In both scenarios, something most people do not consider is the other insurance benefits available under some policies and the implication if there is no premium waiver.

The Importance of Other Insurance Benefits

Most group long-term disability policies and many individual long-term disability insurance policies are part of a larger policy that includes a variety of coverage, including but not limited to:


These benefits may even extend to family members of the insured. However, if a long-term disability claim has been denied and there is no premium waiver, if you fail to pay the premiums your policy could lapse and you would lose your entitlement to all the benefits under your policy of insurance. This can be extremely problematic as often when someone has an injury or illness that is severe enough to require them to apply for long-term disability benefits, there is a very low likelihood of them being able to qualify for coverage under new policies of insurance after the fact. As such, if they lose their coverage for other benefits due to an unjustly denied claim for long-term disability coverage and, as a result of that denial, lose coverage for other benefits under that policy, you may have to sue your insurer not only for the denied long-term disability benefits but also for the replacement costs of equivalent coverage for the other insurance benefits you’ve lost.

How Taylor & Blair LLP Can Help

If you’ve been denied your insurance coverage and have a question about your premium waiver, contact Taylor & Blair LLP today.