Which are the most important disability insurance riders?
When deciding to protect your income, choosing a disability insurance policy can be overwhelming. A LifeGuy.com Disability insurance expert will explain each rider and find the best plan based on your disability income needs and areas of concern.
The Residual Disability Income is the most important DI rider.
Residual Disability Rider
If you are sick or hurt and can’t perform all but some of the duties of your occupation, you will qualify for residual disability benefits. A basic disability insurance contract will only pay disability benefits if you are totally disabled, in other words – you can’t do any of your regular duties of your occupation. Without the Residual Disability rider you would not receive any benefits, even though you may experience a loss of income due to your partial disability.
Most disabilities are partial or residual in nature, most of the time the disabled person can still do at least one or few of their regular duties (answer phone calls, etc), therefore the Residual Rider is the most important rider to have on your policy.
Future Increase Options (FIO)
Early in your career your income has a growing trend, and it’s wise to secure future increases of your Disability Income protection, without the need to show medical insurability in the future. Future Insurability Option, Future Benefit Increase or Benefit Updates – are different names of this important rider. Some carriers do not charge for this rider, others do charge an extra premium to insure your future increases. When your income increases and you decide to exercise the FIO option, you will pay the additional premium for the increase, calculated at your age at that time.
Cost Of Living Adjustment (COLA)
When you become disabled, the COLA rider helps your disability benefits keep up with the inflation. You can choose between 3%, 6% or up to 10% COLA increases. Some companies will let you keep the increases after you recover from your illness or accident and return to work full time. You will only have to pay the additional premium for the extra benefit added to your policy after COLA increases.
Return Of Premium (ROP) Rider
What if you never become disabled? Like some other insurance policies you may have (term life, homeowners insurance, car insurance) at the end of your contract you do not receive anything back if you were lucky enough and did not have to file a claim. That’s great: no claims, no pain! But how about getting your money back if you didn’t use your disability policy?
The great news: you can get your money back, with Return Of Premium (ROP) Rider. There are disability insurance carriers that offer this invaluable rider, returning from 50%, 80% or even 100% of the premiums paid at the end of the insurance contract (normally at age 65). Check with the Disability Center specialists if the carrier of your choice has the ROP option.
Catastrophic Disability Rider (Activities of Daily Living)
If you become sick or hurt to the point that you can’t perform two of the 6 activities of daily living (dressing, eating, bathing, transferring, toileting, maintaining continence) then you are considered catastrophically disabled. If you have the CAT. rider on your policy and satisfy the required conditions above, you will receive an additional benefit, named Catastrophic Disability Benefit, on top of your base benefit. CAT rider can go up to $10,000 per month in addition to your basic benefit.
Other riders to consider:
- Critical Illness rider – pays a lump sum benefit at first diagnosis of few critical illnesses: cancer, heart attack, stroke, etc.
- Supplemental Disability Income Rider – will pay an additional benefit if you file for Social Security Disability and are declined for SS benefits.
- Non-Disabling Injury Rider – reimburses for medical expenses caused by an injury that did not affect your ability to work. This benefit is paid to you, regardless of the fact that your medical bills were covered or not by your health insurance or any other major medical insurance. You may get up to $3,000 per injury! (ask for the availability of this rider when geting a quote for your income protection).
- COBRA Premium Benefit
- Survivor Benefit
- Good Health Benefit
- Presumptive Total Disability
- Surgical Transplant Benefit
- Cosmetic Surgery Benefit
- Rehabilitation Benefit
- Waiver of Premium
- Capital Sum Benefit
- Supplemental Health Benefit
As you see, with so many moving parts it may be overwhelming and intimidating trying to find the best disability insurance plan for you. The Disability insurance experts at LifeGuy.com can help you choose the right coverage. Request a quote below, or contact us at 877-LIFE-GUY, email INFO@LifeGuy.com