New York Disability Insurance
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New York disability insurance has three different kinds of optional riders for its various disability insurance policies. An optional rider is defined as, “Features you can add to a base policy for additional protection.” These include COLA (cost of living adjustment), FIO (future increase option) and AIR (automatic increase rider). Let’s take a look at all three of these.
New York disability insurance has a cost of living adjustment (often called a COLA rider), which takes effect if you must file a disability insurance claim and only in the event that the disability affects you for a period of more than a year. You must choose a percentage option when you first get your New York disability insurance policy and this affects whether or not your monthly benefit will go up every calendar year while you remain on the claim. This also has to do with the maximum CPI you decided upon. Generally the COLA rider is the priciest of all of the riders to be made available to policyholders on a New York disability insurance. The cost of living adjustment is best for individuals who are younger than 42 years because it helps provide protection against inflation and inflation is not as much of a worry for those over 42 years of age.
A future increase option in regards to a New York disability insurance helps protect a person from losing their future income. Without this optional rider, your future monies are not protected whatsoever. A regular New York disability insurance policy will only serve to protect the income you made at the time you took the policy out. The protection does not extend beyond it unless you purchase this rider. This particular rider ensures your earnings for up to a specific period of time, which is usually up to the age of 55 or 60. As you age and as your income increases, you have the unique option of increasing your monthly benefit and this has nothing whatsoever to do with how healthy or unhealthy you are at the time.
An automatic increase rider is the simplest and most basic of all of the riders and it is also generally the most inexpensive. This rider according to New York disability insurance increases your monthly benefit on an annual basis each calendar year, up to a period of approximately five years. Unfortunately your monthly premiums will increase because you are in essence buying additional New York disability insurance. There is for the most part, a 25 percent increase in insurance coverage over, as mentioned previously, a five-year period.
Deciding between the three types of insurance riders is a personal choice and is sometimes a judgment call according to your personal set of circumstances. Some people take a chance and decide to not purchase a cost of living adjustment (COLA), a future increase option (FIO) and an automatic increase rider (AIR). Understanding what all three types of optional riders can and cannot do for your New York disability insurance policy is so important in helping ensure that you protect your money as best you can.
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