The Benefit Increase Option rider could be one of the most important features to consider on a private disability insurance policy—especially for early-career physicians. As your income increases over time, it allows you to apply for higher coverage amounts without needing to provide updated medical information. Avoiding future health screenings makes it easier to secure additional coverage as you age.
There are two Benefit Increase Option riders to select from today, and both options provide these same three key advantages:
- No updated health information is required when applying for increased coverage—your medical insurability is locked in.
- You must be actively at work and not currently disabled when applying for additional coverage under the rider.
- Financial underwriting still applies, meaning any increase in benefits must be supported by your current income and any other disability insurance you may have. The rider simplifies the process but still requires financial justification at the time of benefit increase.
Future Increase Option (FIO)
The Future Increase Option involves an added cost but is generally considered the more flexible of the two benefit increase option riders.
- When purchasing your policy, you select the total amount of additional benefit you would like access to—helping you avoid paying for more than what is practical. The cost of the FIO rider is determined by the amount of additional coverage you want access to.
- You may apply for a benefit increase once per year, at each policy anniversary, but are never required to.
- At each policy anniversary, you decide how much of the available increase to apply for, offering control over the timing and coverage amounts. The unused FIO balance remains on the policy and accessible in future years.
- As you use the FIO rider to purchase additional coverage, your overall premium increases to accommodate the increased benefit but the cost of the rider itself decreases, and may eventually vanish if you exercise the entire allowable amount.
Benefit Increase Rider (BIR / BPR)
The Benefit Increase Rider is considered the more structured of the two benefit increase options and is less costly because the cost is already built into the premium of your policy.
- At every third policy anniversary, you are required to submit a brief application and current income documentation to determine your eligibility for a benefit increase and maintain eligibility for future increases in later years.
- At each three-year anniversary, you must accept at least 50% of any additional benefit made available to you to maintain eligibility for future increases in later years.
- Advanced benefit increases may be available between the three-year anniversaries for those who experience sizable increases in income or lose access to previously available group long-term disability insurance.
- Instead of drawing from a fixed amount of available coverage, you can increase your benefit based on financial eligibility up to the insurer’s maximum issue limits in place at the time of increase.
- The insurer will not decrease your coverage even if your income has decreased since a prior BIR review date.
- Once you've used the Benefit Increase Rider to secure a benefit level you are comfortable with going forward, you can choose to drop it from your policy and would no longer be required to check-in every three years.
In summary, the FIO and BIR/BPR can both help accomplish the primary objective of allowing you the potential to secure additional coverage without requiring updated health information. The FIO rider provides greater flexibility for an added cost and may be appropriate for those who prefer the additional control or fear they may overlook the three-year requirements of the BIR/BPR. The BIR/BPR option may be appropriate for those who are comfortable with scheduled check-ins and a structured approach to increasing their coverage over time in exchange for premium savings.
Regardless of which option you select, our team is here to help you manage your Benefit Increase Option not just at the time of purchase, but throughout your career. We work closely with our clients to ensure they understand when and how to increase coverage, and we’re proud to provide long-term support as our client’s needs change.
Optional riders are available for an additional premium. Some policy benefits and features are not available to all occupations.
Benefit Purchase Rider (BPR) conditions and limitations apply. Medical information is not required when exercising an option for additional coverage. Taken into consideration are your income, occupation and employment, as well as all disability insurance in force, for which you’ve applied, or are eligible to receive. Coverage may not be added while you’re disabled, when benefits are payable, or during a suspension period.
Future Increase Option (FIO) conditions and limitations apply. Medical information is not required when applying to exercise an increase option. Taken into consideration are financial information as well as all disability insurance in force, for which you’ve applied or are eligible to receive.
