Riders are optional benefits and coverages that can be added to disability policies. Of note, they increase the cost of your policy premium.
Consequently, sales agents are incentivized to sell you more riders as this increases their commission.
There are a ton of riders that companies offer.
We list the ones we consider most important below.
Further, we break them up into what we consider must haves and those that are optional.
Historically, the inflation rate has been 3-4% a. year. Recently, inflation has been much higher than this. With COLA, once you qualify for payouts, your policy payouts would adjust for this increase in cost of living.
Think Coca COLA and how much a bottle costs now versus back in the 1980’s.
Goes by other acronyms (e.g. Future purchase option, Benefit increase rider, etc.). But essentially a must have for trainees or early career physicians looking to secure the best rates now, while still in good health, without breaking the bank. Allows for an increase in the policy coverage amount at a later date without having to go through a health screening.
Without this option, if one were to try to increase their policy coverage amount at a later date, and they developed a health condition in the interim, this could exclude you from increasing your policy pay out.
Another must. What would happen if you could only work part-time due to a disability? Some policies would not cover your disability, as you are still technically able to work. With these riders, if you are only able to work part time, you will be eligible for a certain percentage of lost wages.
Definitions of partial / residual disability differ based on the company. Make sure you understand each company's specific definition before purchasing a policy.
In general (company dependent), "basic" partial / residual disability triggers a pay out if you lose 20% of your normal income due to disability.
An enhanced partial disability riders decrease this threshold to 15%. However, this increases the cost of the policy.
Pays an additional amount to account for student loan payments.
This is dependent on the company, but the approximate maximum monthly benefit offered is 2,500$
If you become severely disabled (e.g. requiring assistance with normal activities of daily living), this will allow for a larger payout (i.e. for home health care).
Again, while policy payouts are somewhat dependent on the company, for trainees the approximate maximum monthly benefit offered is 8,000$
For practicing physicians, the approximate maximum benefit is 12,000$
If you become disabled, the insurance companies puts aside some money in a retirement account.
Again, while the amount funded is dependent on the specific insurance company, for trainees the approximate maximum monthly benefit offered is 1,000$
For practicing physicians, the approximate maximum benefit is 5,100$, if >50 the maximum benefit approaches 5,600$
