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Guardian DI Future Increase Option vs Benefit Purchase Rider

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  • Guardian DI Future Increase Option vs Benefit Purchase Rider

    I know that the benefit purchase rider is free and offers me regular increases in benefit (and corresponding premium) as well as the fact that if I don't accept, I lose the ability to increase coverage later. Could someone walk me through what the advantages/disadvantages of the Future Increase Option are? I am a resident just starting out looking at the max $5,000/mo coverage but am not sure about the best way to go about increasing my coverage towards end of training. Some thoughts I have are whether there is any additional medical underwriting that has to happen or whether I might lose training discounts once I increase coverage with either.

  • #2

    First of all, you won't be able to qualify for an increase until you are an attending. The increase is based upon your earnings.
    Benefit purchase rider requires a substantial portion be exercised.
    The purchase option you pay for, and it is optional. As you choose to exercise, your option price will go down as your cover costs increases.


    • #3
      Pros to Benefit Update process:
      1: It is free.
      2: It forces you to keep up on a review of coverage and if adequate in case of a disability.
      3: It has 2 extra triggers to allow increases (income increase or loss of group disability, think about leaving residency, both would be in play).

      Cons to Benefit Update process:
      1: You don't pay for it so you don't control it.
      2: If you don't want to do a review of your income then the feature can be lost.
      3: The option to increase is not necessarily every year and may not line up with your needs.

      Pros to Future Purchase Options
      1: You get options presented to you every year.
      2: You get to decide when and how much to increase (within financial Issue and Participation limits of course).
      3: Depending on the company when you use the increase options up the cost for those optional rights go away.

      Cons to Future Purchase Options:
      1: You are paying for something that you could have gotten for free.
      2: Because the options are annual it may not match up to when you want to buy more coverage.
      3: Because it is optional some times you might put off looking at it the total coverage for another year when you really should have looked it it.
      4: If your income never goes up to the level needed to exercise the pool of options you might be paying for something you never can qualify to purchase.
      Scott Nelson-Archer, CLU, ChFC
      303-953-0263 Direct / [email protected]