Waiver of Premium: Meaning, Disability Rules & How It Works in Canada

If you can’t work because of illness or injury, the waiver of premium benefit can save your disability insurance — and your wallet.

Many Canadians don’t realize their policy may stop requiring monthly payments while they’re disabled. But insurers don’t always tell you how to qualify, how long the protection lasts, or what to do if they deny the waiver.

This guide explains waiver of premium meaning, what the benefit covers, and what to do if your insurance company refuses your waiver of premium disability request.

What Is a Waiver of Premium? (Simple Meaning)

A waiver of premium is a feature in many long-term disability (LTD), life, and mortgage insurance policies. It stops your monthly insurance payments when you’re “totally disabled” under the policy.

In simple terms:
You don’t have to pay premiums while you’re disabled, but your coverage stays active.

This protects you from losing your insurance at the exact time you need it the most.

Waiver of Premium Meaning (Insurance Definition)

Most policies define waiver of premium as:

• A contractual benefit that suspends premium payments
• After you meet the insurer’s disability definition
• For as long as the disability continues
• So your coverage doesn’t lapse

The definition often connects to the same criteria used for long-term disability benefits, including the own occupation test (first 2 years) and any occupation test (after 24 months with the change of defintion).

How the Waiver of Premium Works (Step-by-Step)

Here’s the typical process in Canada:

1. You become disabled and can’t work due to illness or injury.
2. You submit a claim to your insurer requesting a waiver of premium.
3. Your doctor provides medical evidence confirming you’re unable to work.
4. The insurer reviews your file and decides if you meet the disability test.
5. If approved, your premium payments stop — sometimes retroactive to the date you stopped working.
6. Your insurance remains active while the waiver is in place.
7. You may need to provide ongoing medical updates to keep the waiver approved.

What Does the Waiver of Premium Benefit Cover?

A waiver of premium benefit usually applies to:

• Long-term disability insurance
• Life insurance policies
• Some mortgage or creditor insurance policies

Once approved, your insurer covers the cost of:

• All premiums normally paid by you
• Policy-related fees (depending on the contract)

Waiver of Premium Disability Rules

To qualify, you usually must prove:

• You are totally disabled under the policy
• Your condition prevents you from performing your own occupation (first 2 years)
• Your condition prevents you from any occupation you’re suited for (after 2 years)
• You are receiving appropriate medical treatment
• You continue to provide updated medical evidence

Insurers frequently deny waiver applications for reasons such as:

• Claiming you’re not “totally disabled”
• Insufficient medical documentation
• Disagreements over work restrictions
• Surveillance or “inconsistent” social media activity
• Switching doctors or treatment gaps

Common Problems Canadians Face With Waiver of Premium Claims

People often run into issues like:

• Insurers approving the disability claim but denying the waiver
• Cut-offs at the two-year “any occupation” mark
• Requests for additional medical updates
• Pressure to return to work early
• Retroactive premium charges if the waiver is denied

Your Rights If the Insurer Denies Your Waiver of Premium

You do not have to accept the insurer’s decision.

In Canada, you can:

• Challenge the denial legally
• Force the insurer to reinstate coverage
• Recover back-dated premiums you had to pay
• Seek compensation for improperly denied disability benefits

Our legal team has helped thousands of Canadians when insurers wrongfully deny disability-related benefits — including waiver of premium claims.

Speak to a Disability Lawyer About a Waiver of Premium Denial

If your waiver of premium disability claim was denied, delayed, or cut off, you’re not alone.

Our disability lawyers at Samfiru Tumarkin LLP know how insurers operate — and we fight to keep your coverage active while you’re unable to work.

There are no upfront fees, and you don’t pay unless we win.

📞 Call us at 1-855-821-5900, email help@disabilityrights.ca, or use our online form for a FREE consultation.