Deferment Period

★

4.5

Rated by 1000 readers

Share

Share With This

• Facebook
• LinkedIn
• Twitter

What is a Deferment Period in Insurance?

A deferment period, in the context of insurance, refers to a specific duration during which the insured individual, referred to as the life assured, has become unable to work until they start receiving benefits from their insurance policy¹

Why is a Deferment Period Important?

A deferment period is significant because it accounts for scenarios where the life assured becomes unable to work due to reasons such as illness or injury. During this time, the individual does not accumulate benefits, and the claim payments are deferred.

When Does a Deferment Period Apply?

The deferment period applies when the life assured becomes unable to work due to specific reasons, such as illness or injury, which prevent them from fulfilling their regular work responsibilities.

For example, consider an individual who is covered under a life insurance policy provided by their employer. If they meet with an accident and are bedridden for a certain period, they would not be able to work during this time. This duration when they are unable to work until they start receiving benefits is referred to as the deferment period.

Understanding the concept of a deferment period is essential for policyholders to know their rights and benefits under their insurance policy. It provides a cushion during times when the life assured is unable to work, ensuring they are not left without a financial safety net during such difficult times.