Disability Insurance Basics
What is a disability insurance cost of living adjustment (COLA) rider?
A cost of living adjustment (COLA) rider increases your disability insurance benefits each year while you are on claim to keep up with inflation. COLA riders typically increase benefits by 3-5% per year. COLA riders add cost to the policy but protect your purchasing power during a long-term disability.
Key Points
- COLA rider: increases benefits each year while on claim
- Protects purchasing power during a long-term disability
- Typical COLA increase: 3-5% per year
- Adds cost to the policy
- Best for: people who purchase a policy with a long benefit period (to age 65)