Does Your Life Insurance Have DWP?

By now everyone is aware that all living things live until they don't. It's not really an if situation but a when situation. It sounds pretty obvious when you say it out loud, but who is actually planning to go along with the facts?

The two main types of life insurance are Whole Life and Term Life. Whole life will be here for your whole life and term life will be here for the term you purchase for. Majority of people today are buying term insurance for the IF factor of whether they die in a period of time or not, usually because that's what is promoted by "financial gurus" and the institutions selling it. In reality your gambling on your own life against a major company who has tons of data for people just like you. Majority of time, over 98% of the time, the company will win.

Everyone has their opinions on life insurance but there's one major component to life insurance that is overlooked way too many times. It's an industry exclusive and majority of people don't have it. It's name, "Disability Waiver of Premium" (DWP).

What does DWP do? In the event you become disabled, too sick or too hurt, to work again the life insurance company will pay your premiums until the age of retirement or you die, whichever comes first. On a term life insurance policy, if your company allows it, the term policy will be converted to a whole life contract and the premiums will be funded until one of the two conditions just mentioned. For a whole life policy, the life insurance company will fund the policy until one of the two conditions. With this in place you will no longer have to worry about the premiums if you become disabled and you will have access to the cash value. You will be able to access the cash value of the policy, in the form of a withdrawal FROM the policy, loan AGAINST the policy, or surrender OF the policy.

A major question you need to ask yourself and advisor is, "If I become disabled do I have in writing anywhere that says, "In the event I become disabled someone will continue to make deposits into my financial life?"

While some people may have passive income to help with income lost, most people just have the disability insurance provided through work that might pay 60% of their original income. You're also no longer allowed to contribute to your retirement plans, so if you become disabled so does your retirement. How will you now try to reduce your spending in your everyday life? Getting rid of any bill you can will help. Your main goal now will be to keep as much income as you can so you're able to spend it on your health. Taking the life insurance bill off the table while still being able to enjoy the benefits of the cash value and long term care features can be a major win for you and your family.

Reach out to your life insurance provider to see if your policy has Disability Waiver of Premium on it. If you don't know who to contact or would like to talk to someone else, please reach out and I will be glad to help. This is a major component that doesn't need to be overlooked.

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