How to Insure Your Income: Cost of Living Benefits

These benefits are offered by most insurance companies. Once a person goes on claim, the company will automatically increase the amount of the benefit to reflect changes in the cost of living.

So, not only is the hypothetical doctor receiving $10,000 a month, but -- with the COLA benefit -- the insurance company has to increase the benefit by as much as 5 percent per year. By the time the doctor is 60 -- and still collecting benefits -- the monthly payment will have doubled.

The only answer here from an insurer's perspective may be to eliminate this benefit completely -- or reduce the amount of such increases to a point whereby they may be only token gestures to compensate for inflation.