The scope of coverage can, often times, be tailored to meet individual and familial needs with a number of optional benefit and rider choices, the more common of which are listed here. A policy rider is an optional feature, typically available for an additional cost, that can enhance your policy to provide for additional risks generally associated with disability. These supplemental or optional benefits will vary company to company.
Cost of Living Adjustment (COLA) Rider
A COLA rider periodically increases the disability benefit amount that is being paid to a disabled insured. The increases are typically based on a percentage stated in the policy or tied to increases in the cost of living (measured by the Consumer Price Index).
Future Purchase Option Rider
Future purchase options allow the insured to increase their benefits on future specified dates in accordance with increases in the insured’s earnings. Purchase options are generally not available once the insured becomes disabled.
Partial Disability Rider
The partial disability rider pays an amount specified in the policy, often 50 percent of the full disability benefit amount, when the insured is able to return to work on a limited or part time basis.
Residual Disability Rider
This rider provides a benefit if the insured can return to work full-time but income is not fully restored. The residual disability rider will provide a benefit when the insured has lost income as a result of disability. The amount payable is established according to a formula specified in the policy.
Return of Premium Rider
Return of premium is a rider that requires the insurer to return a portion of the premiums paid to the insured provided benefits received during a specified period (stated in the policy) remain below a specified level.
Waiver of Premium Rider
Waiver of premium allows an insured to keep coverage in force without having to make premium payments when disabled for a specified amount of time.