Optional Riders
Home Up Up Disability Carriers Optional Riders Issue Limits Underwriting


Own Occupation 

Liberalizes the definition of total disability so that benefits will not be reduced due to a disability you are unable to work in your occupation and return to work in another occupation. 


When you return to work after a total disability, you may still have an income loss because of your sickness or injury.  Or you may never be totally disabled, but still have an income loss because of a sickness or injury.  In situations like these, it is important to have a Residual Disability rider. 

Residual Indemnity is a proportionate amount of the monthly indemnity for the policy.  It is determined by dividing your loss of income by your prior income and multiplying by the monthly indemnity.  Either total or residual disability may be used to satisfy the elimination period for disability.

The Residual Disability benefit is paid to you when you are at work and are not totally disabled under the terms of the policy, but because of sickness or injury your loss of income is at least 20% of your prior income.

Even if you have recovered from the sickness or injury that caused residual disability, you may also be considered residually disabled so long as your prior loss of income and the loss is a result of such sickness or injury.

If your loss of income is more than 75% of prior income, your loss may be deemed at 100%.

Future Insurance Option ( FIO, FPO, GIO)

This rider provides the option for you to purchase additional disability income benefits in the future, thereby helping your coverage to keep pace with your rising income, regardless of any change in your health or occupation.  Specific income and underwriting rules apply, but no evidence of good health is required.  This rider can be exercised all at once or at specific intervals, depending on the insurance carrier issuing the policy. 

Depending on the insurance company, this rider may be exercised while disabled.  This is an important feature and you will pay more for it.  Remember, the purpose of this rider is to allow you to increase your monthly benefit to keep pace with your income without medical underwriting.  

Cost of Living Adjustment

This rider increases your monthly benefit, while on claim, by a certain percentage.  This percentage could be at simple or compounded rates and depends on the insurance company issuing the policy.  This rider is important because it increases your monthly benefit, while disabled, by a certain percentage rate listed in your policy to keep pace with inflation.  Options usually include 3% and 6% and the rates available also depends on the company issuing the policy. 

Automatic Increase 

This rider makes it easy for you to increase your disability income benefits, despite any change in your health, income or occupation.    Usually the increase is offered once a year on your anniversary.  The benefit and premium paid will increase each year at the designated percentage rate.  

Not all insurance carriers offer this rider.  The purpose of this rider is to allow your monthly benefit to increase annually without providing financial or medical evidence of insurability.  This is important if you do not expect your earnings to increase dramatically or you are uninsurable.  Not Available in CA.

Return of Premium

This rider provides a return of premium after a set amount of years so long as you do not make a claim under your policy.  Not all insurance companies offer this rider.

Group Disability Replacement

The Group Disability Replacement rider allows you to purchase more disability income insurance, in spite of any changes in your health when, before age 60, your group long term disability insurance is canceled and not replaced or your employment terminates with an employer where you were covered by a group long term disability plan at the time of your termination.

Unemployment Premium Waiver Option 

During a period of unemployment, this rider will help you to keep your policy in force by refunding and waiving premiums, under certain conditions.

RetireGuardŽ Rider

This rider provides benefits to help cover pension contributions that would have been made to eligible qualified defined contribution plans had the insured remained healthy. RetireguardŽ  is a total disability only benefit. A trust is established and benefits are paid to the trust to be invested in funds chosen by the insured. When the insured reaches age 65 or 67 (depending on the benefit period chosen/available) the trust assets are distributed to the insured. 

Catastrophic Benefit Rider

This rider provides benefits that cover up to 100% of pre DI earned income when combined with a base policy in the event of a catastrophic disability. Monthly benefits is available up to $8,000 per month. Benefits are payable if the insured has (1) Presumptive Disability, and (2) The inability to perform 2 of  6 activities of Daily Living or has a severe cognitive impairment



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Copyright 2001 Kaplan Management and Insurance Services

Last modified: Thursday, May 29, 2008