COLA, or Cost Of Living Adjustment, is an important part of any long-term disability insurance policy.

Most of these policies do not carry a COLA rider. The cost of living adjustment is a yearly evaluation of your dollar’s purchasing power and an adjustment in the amount you are paid in disability. Because the cost of living continues to increase every year, a fixed disability income will become less valuable with each passing year. Eventually the disability income will be inadequate to provide for your needs. However, this particular type of ricer is fairly expensive. You must weigh the cost of this rider against the probability that you will need long-term disability. Many would suggest the closer you are to retirement the less likely you will need a COLA rider. This information is general in nature and should not substitute for the advice of an expert in the field.