What is waiver of premium rider with ULIP and why should one opt for it?

livemint.com:

long term financial goals, investors tend to buy a bouquet of financial products and keep them in their portfolio such as equity, fixed income instruments, term plan as well as ULIP (unit linked insurance plan). Since these products are bought with long term goals — such as retirement, higher education and buying a house — in mind, it is imperative to keep these insurance policies operational. However, some of the policyholdersor their nominees might lose continuity of their policy in case of an unfortunate event such as death.

This is a phenomenon (letting the policy lapse) must be avoided at all costs. This can be done, interalia, by buying a waiver of premium (WOP) rider. This is an important rider that one is encouraged to buy along with the insurance plan to ensure that the policy does not lapse for non-payment of premium.

The non-payment could occur because of the policyholder’s death or disability. In other words, a ULIP that might come to an end after the policyholder’s death would continue till the end of policy’s tenure when the policyholder opt for this rider (WOP). One of the key reasons for buying this rider is to keep the insurance policy active in order to stay true to financial goals.

This provides an additional cover of sorts as it keeps the ULIP’s status active and safeguards both its investment and insurance benefits. Before one happens to think twice about the waiver of premium, one should remember that adding this feature at the time of ULIP purchase is crucial and it cannot be done later. “The waiver of premium option in ULIPs plays a pivotal role.