Payor Benefit Rider - Everything You Need To Know

Find out more about what a payor benefit rider is and whether it's right for you.
By Mike Parker
Updated Nov 23, 2022
A family who are reaping the benefits of a Payor Benefit Insurance Rider.
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Riders are a great way of adding customized benefits to your life insurance so that you and your loved ones are financially protected in specific circumstances.

One such addition you can get to your insurance is a payor benefit rider, which can help people who are covering the costs of life insurance for someone else.

Read our guide to understand what a payor benefit rider is, the benefits and downsides of them, and whether you should get one.

What Is a Rider?

Life insurance is supposed to give you a sense of peace around protecting your family. However, there are specific cases when you may need to customize your benefits and coverage.

Insurance riders are one way that you can do this. These are additional coverage clauses or supplemental benefits that you can add to your policy that will do specific things such as payout money, extend your coverage, or accelerate your death benefit payout.

There are various types of riders out there that can be added to both term and permanent insurance policies. 

What Other Types of Insurance Riders Can People Get?

Here are a few common riders that can be added to your term and permanent life insurance policies:

  • Guaranteed insurability rider.

  • Accidental death rider.

  • Waiver of premium rider.

  • Family income benefit rider.

  • Accelerated death benefit rider.

  • Child term rider.

  • Spouse rider.

  • Long-term care (LTC) rider.

If you’d like to learn more about these riders or additional coverage, give our team of experienced life insurance agents a call at 1-888-912-2132 or send an email to

For example, if you have a permanent life insurance plan, you can get a disability rider included as one of your supplemental benefits. This protects you in case you are ever incapacitated by an injury and can’t pay your life insurance premiums.

Another example is a long-term care rider which can be used to pay out a lump sum of money taken from your death benefit if you are ever in a situation where you need full-time care from a qualified nurse.

What Is a Death Benefit?

A death benefit is the amount of money that your life insurance contract is worth. It is sometimes known as the face value of a contract. When you die, your beneficiaries will be paid the death benefit amount of your life insurance contract.

For example, let’s say you buy life insurance worth $100,000. If you die, your beneficiaries will receive a death benefit of $100,000.

A person whose family is protected by an insurance rider

Source: Pexels

What Is a Payor Benefit Rider?

A payor benefit rider, or waiver of premium rider, is an added term of coverage that can be used in situations where a policy’s premiums are being paid by someone other than the policyholder.

If a life insurance policy has this type of living rider, it will waive all future premiums on a term or permanent life policy if the payor (the person paying the monthly premiums) ever dies or becomes disabled.

Terms You Should Know:

Payor: The person responsible for premium payment or costs relating to a life insurance policy.

Living rider: This is a supplemental benefit that policyholders can use while they are still alive.

Policyholder: This is the person that is covered by a term or permanent life insurance contract. When they die, the policy will pay out a death benefit to their beneficiaries.

Waive premiums: This means to end or excuse future premium payments on a life insurance policy.

Permanent life insurance: This is permanent coverage that will remain in place for the rest of your life as long as you keep your premiums up to date.

Term life insurance: This is temporary coverage that has an expiration date after which the contract ends and there is no death benefit. On average, term life policies can be anywhere from five to 30 years in length.

Having a waiver of premium benefit rider can be useful in various situations, especially if you’re financially responsible for:

  • A minor with a life insurance contract.

  • A family member with a life insurance contract.

  • A family member with a chronic condition or disability.

Once the rider is enacted, any further payments on the policy will not be necessary and the policyholder won’t have to pay premiums to keep their life coverage.

Depending on the type of insurance policy (term or permanent), the policy will remain in place for:

  • The remainder of the policyholder’s life, or 

  • The full length of the policy’s term.

A payor benefit rider protecting a family.

Source: Pexels

How Does a Payor Benefit Rider Work?

When you take out a life insurance policy for anyone, there is usually an application process you’ll need to go through before you can get coverage. 

During this process, the insurance company will perform underwriting, ask who will be responsible for payment, and find out if you have an insurable interest in the person.

What Is an Insurable Interest?

In the U.S., you can’t take a life insurance policy out on anyone. In order to legally get a life insurance policy for someone, you need to demonstrate an insurable interest in that person.

This can take many forms, but generally speaking, if the person is a close relative or financially dependent on you, then this is usually enough to demonstrate an insurable interest.

They will then offer you specific riders based on your situation, such as a long-term care rider or a waiver of premium benefit rider.

Once your application has been approved and all parties have signed the document, the policy will begin and the payor benefit rider will be in force.

How Will Medical Underwriting Work with a Payor Benefit Rider?

Medical underwriting is a process that life insurance companies perform on prospective policyholders to calculate the risk profile of the applicant.

During this process, life insurance companies will:

  • Look into your medical history.

  • Consider your family’s medical history.

  • Conduct a medical exam.

  • Ask questions about your health.

If you’re applying for a waiver of premium rider with a life insurance policy, the life insurance company will need to look into the medical history of both the payor and the policyholder.

This is typically a requirement so that life insurance companies can get a better picture of the risks they will be taking on by adding a payor benefit rider to the policy.

If at any point the person responsible for paying the insurance policy’s premiums becomes disabled or dies, the rider will come into effect and the policy won’t require any further premium payments.

For example, let’s say a person decides to get life insurance for their 18-year-old daughter and agrees to pay the monthly premiums for the first ten years. They also ask that their life insurance company adds a waiver of premium rider to the policy, which is accepted.

Five years later, they (the payor) are involved in a car accident which leaves them unable to work and earn money.

In this case, the payor is able to use the payor benefit (waiver of premium) rider to ensure that their daughter continues to have life insurance coverage even if they don’t have the means to pay the policy’s premiums anymore.

Will Adding a Payor Benefit Rider to a Life Insurance Contract Be Expensive?

The cost of adding this type of rider will depend on your insurance company, the policyholder’s risk profile, and the value of the contract.

You can definitely expect to pay more each month for each rider that you add to your life insurance.

This is because with each rider, the risk of the insurance provider having to pay out for different reasons other than a policyholder’s death, increases.

However, the cost of adding a waiver of premium payor benefit rider is usually minor and won’t raise your premiums significantly.

As you can probably tell, getting a payor benefit rider can be beneficial, but whether it’s the right choice for you will depend on your unique circumstances.

If you need tailored life insurance advice and guidance, reach out to one of our life insurance experts today to get help. Send an email to to start the process.

Remember That an Application for a Payor Benefit Rider Can Be Rejected

In some cases, you may be approved for a life insurance contract, but your application to add a payor benefit to the policy may be rejected.

This can happen for a number of reasons and it will depend on the insurance company and both the payor and policyholder’s medical history.

Factors that might affect the outcome of your waiver of premium rider application:

  • Age.

  • Tobacco use.

  • Medical conditions.

  • Gender.

  • Family medical history.

If your application is rejected by one life insurance company, you can apply to another and see if they will accept it.

A man whose application for a Payor Benefit Rider was rejected

Source: Pexels

Who Should Get a Payor Benefit Rider?

If you are currently responsible for the payment of a life insurance policy for your child, parent, or close family member, then getting a payor benefit rider might be a good idea.

Here are a few examples of people who could benefit from a payor benefit rider.

  • You're financially responsible for another person’s life insurance policy.

  • If you have many dependents and are the main breadwinner.

  • If you don’t have significant savings to cover the costs of monthly life insurance premiums.

  • If you don’t have a disability benefit or accidental death benefit in place.

Ultimately, the goal of a payor benefit rider is to help you protect your loved ones’ financial security if you are unable to cover the costs of a life insurance policy.

Payor Benefit Riders Typically Have an Expiration Date

It’s important to understand that you won’t be covered by a payor benefit rider indefinitely.

Your policy will usually state the specific terms and conditions that apply to this benefit and most riders have a maximum age of  65.

Keep this in mind if you’re thinking about getting a payor benefit rider added to a life insurance policy and consider other options like a term life insurance plan if this happens.

What Are the Benefits and Downsides of a Payor Benefit Rider?

Payor benefit riders give families added security against total disability or death.You’ll end up paying more each month for the same amount of coverage.
The cost of adding a waiver of premium benefit is usually affordable.Both the policyholder and payor need to go through medical underwriting.
If a payor dies or becomes disabled, all future premiums are waived.Payor benefit riders have expiration dates.
The process of getting a payor benefit rider added to a life insurance contract is straightforward.It is possible to be accepted for life insurance coverage but have a payor benefit rider rejected.

A family who are reaping the benefits of a Payor Benefit Insurance Rider.

Source: Pexels

Payor Benefit Rider FAQs

What is the definition of a payor rider?

A payor rider is an additional feature that can be added to a life insurance contract that waives future premium payments if the contract’s payor becomes disabled or dies.

What are the benefits of riders in insurance?

Riders allow policyholders and payors to customize their coverage and get additional living benefits that they may need later in life. There are lots of different types of riders that can be added to your insurance and the cost is usually negligible.

What is a payor on a life insurance policy?

A payor is a person responsible for paying premiums and other costs of a life insurance policy. Typically they are also the policyholder, but in some cases, they can be two different people.

What is a rider in insurance?

Riders are additional terms of coverage or supplemental benefits that allow you to customize your coverage in different ways. Riders can be a useful way of ensuring your financial security against disability and accidental death, and can help you pay for expenses such as long-term care while you’re alive.

Whose life is covered on a payor benefit clause?

The life of the payor or the person responsible for paying the monthly premiums of a life insurance contract is covered by a payor benefit clause. The life insurance contract will only pay out if the policyholder dies.

Where Can I Learn More about Riders and Life Insurance?

A payor benefit rider is just one of many riders that you can add to life insurance contracts. This kind of benefit is especially useful if you are worried about paying the costs of a life insurance plan if you ever become disabled or die.

If you’re interested in learning about other types of life insurance riders or would like to learn about costs, coverage, and other life insurance topics, be sure to visit our life insurance hub to read our latest articles and guides.

You can also reach out to one of our expert advisors if you’re looking for term, permanent, or whole life insurance plans in your state. Give us a call at 1-888-912-2132 or send an email to to get assistance.