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Disability Insurance and Its Riders

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Almost every single insurance provider confers the opportunity of opting for special kinds of rider with particular purposes. A rider is defined, by the website, as “an attachment to a policy that modifies its conditions by expanding or restricting benefits or excluding certain conditions from coverage.” There are many types of riders, so you have many options at your disposal. The key point here is that you know how to choose those that really satisfy your needs and expectations.

One main rider, which by the way is really common today, is called Cost of Living Adjustment. This rider, which is frequently called COLA rider, is made valid only if you go on a disability claim. Then, it is available only if the disability is present for more than a year. This one is considered to be the most expensive rider when dealing with a disability insurance policy. Due to the fact that COLA is intended to protect you against inflation, it is not recommended for those people who are over 42 years old since, at this point, you are not very likely to face it as you were when you were younger. Nevertheless, if you are younger, it is suggested that you save your money in this way because, in addition, suffering a permanent disability would be fatal for you.

Another available rider refers to Automatic Increase Rider. This is an option that is focused on increasing your whole benefit for five years. The key in this is that, as you are purchasing additional disability insurance coverage, your premiums will go up. As an average, they provide you with an extra 25% coverage increase at the end of the five years. Its objective is to make premiums go up subject to inflation, but avoiding the fact that you have to be aware of it. Thus, if your goal is to increase your coverage, this is an option for you to take into consideration.

The Future Increase Option is an optional choice you have at your disposal. This rider is designed in order to increase your earnings and your future earnings, which are different. It is impossible for your income to automatically grow without this. A normal disability insurance policy just takes care of the income made when the policy was taken out. For this matter, you just need to present the last tax return to confirm your new income level.

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