How to Insure Your Income: Optional Policy Benefits
When you're considering an income insurance package, the final ingredient is the inclusion of any optional policy benefits beyond the basic disability benefits.
Their inclusion most often will be dependent on your needs and your ability to pay the extra premium for these options. The additional premium charged for the optional benefits described here is relatively low. Depending on the option, the additional cost would range from $30 to possibly $100 annually.
The options that appeal to most people include:
- Future Increase Options
- Cost of Living Rider
- Lifetime Accident and Sickness Benefit
The Future Increase Option (FIO) generally is important to any applicant who is under 40 years of age. It protects future insurability by providing the guaranteed right to purchase additional amounts of disability income in future years. Normally, the rider is not available past age 40, although some insurers may offer it up to age 50.
Of course, many people are concerned about changes in the cost of living. To protect the purchasing power of disability income benefits, many applicants add the Cost of Living Rider to their base policy. This simply states that, as a predetermined cost of living standard increases, the benefits provided by the policy will increase a corresponding amount.
Although it is a relatively expensive option, Lifetime Accident and Sickness has particular appeal to a person who is likely to experience dramatic increases in earnings over the years.
A Social Security Rider may serve your needs by providing additional disability benefits (usually for the first year), while a determination is made as to your eligibility for Social Security benefits.
Planning for the right package of benefits also can be achieved through the use of the Additional Monthly Benefit rider, in much the same way the Social Security Rider is used.
Other options, such the as the Hospital Confinement or Non-Disabling Injury riders will appeal to certain people, depending on their needs and objectives. These are particularly useful for people whose jobs are physically demanding enough that returning to work would be especially difficult.
