Announcement

Collapse
No announcement yet.

Guardian DI Future Increase Option vs Benefit Purchase Rider

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

  • 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
    https://www.whitecoatinvestor.com/di...-4-the-riders/

    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.

    Comment


    • #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]

      Comment

      Working...
      X