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14.5.3 Cost of Living Adjustment Rider

The cost of living adjustment (COLA) rider is geared toward adjusting the benefit according to an individual's current living conditions, after disability benefits have begun. It is a fairly expensive rider. Once a year (usually on anniversary of disability) the benefit amount is modified to reflect changes in the consumer price index (CPI).

When the disability terminates, the policyowner has two options. He/she can opt to keep the policy at the new (increased) benefit level by paying a higher premium OR choose to let the benefit return to the original amount and pay the original premium decided upon.