An insurance waiver is a formal document signifying the decline of an insurance plan’s coverage. By signing the waiver, an individual essentially signs away his/her right to have the insurance company cover them.
Essentially, a waiver serves as a tool to eliminate or reduce liability for one party involved in a contract.
Why should I use an insurance waiver?
Now that we understand what a waiver in insurance is, let’s look at an example to understand it better.
In insurance agreements, waivers often come with specific requirements or conditions for them to take effect. Take, for example, a life insurance policy can have a waiver of premium. This provision shields the insured from the risk of losing coverage if he/she is unable to pay the premiums due to a severe illness or disability. However, for the premium to be waived, certain criteria must be met, such as the disability lasting for at least six months and the policyholder meeting specific age and health requirements at the time of the agreement.
Here are a few reasons why opting for a waiver might be a good decision.
If your employer permits you to sign a waiver of the insurance coverage when you are already being insured by other sources, such as your parents or spouse, signing out is advantageous. You may receive a better pay rise or any other non-monetary benefits in such scenarios.
If you already have adequate coverage under an existing plan, you should opt out as it will reduce the outflow of cash in the form of premiums. For instance, being covered under a spouse's health insurance plan might eliminate the need for a separate, potentially pricier plan.
Waivers allow individuals to customise their insurance coverage to better suit their needs. For instance, in indemnity health insurance, a waiver might allow you to opt out of certain mandatory coverages that aren't relevant to your situation. This can help you customise your health insurance policy to meet your requirements.
An insurance waiver can also be a risk management tool. When you sign a waiver, you decide what risks you want to take on yourself versus what your insurance covers.
Disclaimer: The information provided in this blog is for educational and informational purposes only. It may contain outdated data and information regarding the relevant industry. It is advised to verify the relevance of the data and information before taking any major steps. ICICI Lombard is not liable for any inaccuracies or consequences resulting from the use of this outdated information.