Cost of Living Rider

Cost of Living Rider A cost of living rider is an add-on feature to an annuity contract that adjusts the amount of your annuity payments annually to help them keep up with increases in the cost of living. Other names for cost of living riders include cost of living adjustment riders and COLA riders. COLA riders are typically available for life insurance policies, annuities, and long-term care insurance policies. They can also be added to some retirement plans. For example a cost of living rider increases the disability benefit each year according to a percentage derived from the Consumer Price Index measure. What the cost of living rider gives the insured is that it adjusts the amount of monthly disability benefit received by the insured each year during his or her disability. The first adjustment is on the 13th month of disability. The adjustment that is made in the monthly benefit depends upon the way the rider is designed. The cost of a COLA rider will vary depending on the type of policy or plan you have, the amount of the benefit increase, and the frequency of the increases. However, COLA riders typically add a small amount to your premium Whether or not you should get a COLA rider depends on your individual circumstances and financial goals. If you are concerned about inflation and want to protect your purchasing power in retirement, a COLA rider can be a valuable tool. However, it is important to weigh the costs and benefits of a COLA rider before you decide whether or not to add it to your policy or plan. #benewinsurance #insurtech #inclusiveinsurance #insurance #reinsurance #takaful