Story at-a-glance
- A COLA rider increases your monthly disability benefit each year you’re on claim, usually by 3%.
- It helps your income keep pace with inflation if you’re disabled long-term.
- This rider is especially helpful if you’re young—because inflation can shrink the value of fixed benefits over time.
- Without COLA, your benefit could buy less each year.
Why the COLA Rider Matters
If you become disabled and stop working, your monthly benefit replaces a portion of your income. But what happens five or ten years later, when the cost of living goes up?
Groceries, housing, gas, tuition—prices rise almost every year. That means a fixed benefit could slowly lose value.
That’s why many doctors and dentists choose to add a Cost-of-Living Adjustment (COLA) rider to their disability insurance.
How COLA Works
The COLA rider increases your monthly disability benefit while you’re on claim, typically once a year.
There are two common types:
- Fixed COLA – Your benefit increases by a set percentage each year (usually 3%).
- CPI-Linked COLA – Your benefit increases based on the Consumer Price Index (CPI), which tracks real inflation.
The adjustment usually starts after 12 months of continuous disability and continues each year while you’re still disabled.
A Simple Example
Let’s say you’re 32 and your monthly benefit is $10,000. At 3% COLA, if you stay on claim for 10 years, your benefit would grow to about $13,400/month.
That extra $3,400 per month can help cover higher living costs over time.
Without a COLA rider, you’d still be getting $10,000—even though everything costs more.
Who Should Consider COLA?
COLA riders are especially valuable if:
- You’re under age 45
- You expect to work for many more years
- You want to protect your long-term standard of living
Doctors and dentists in their 20s, 30s, or early 40s are the most at risk of inflation eroding their coverage during a long-term claim.
What Does It Cost?
Adding a COLA rider increases your premium slightly—usually by 10%–20% depending on the insurer and benefit amount.
But for many doctors, it’s worth the added peace of mind.
Final Thought
The COLA rider helps protect your future—not just your present.
If you’re young and buying disability insurance, this small add-on can make a big difference if you ever face a long-term disability.
Want to see how a COLA rider affects your premium? Click the button below to request a personalized quote.
We’ll walk you through the numbers and help you decide what’s right for you.
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