If a disability income policy has a cost-of-living adjustment rider, how often must benefits usually be increased?

A cost-of-living adjustment (COLA) rider in a disability income policy ensures that the benefits provided will be adjusted periodically to keep pace with inflation and the increasing cost of living. Typically, these adjustments are made at least once per year from the time the benefits begin. This annual adjustment serves to maintain the purchasing power of the benefits, ensuring that the insured receives an amount that can adequately support their needs over time, especially given that inflation can erode the value of fixed income payments.

Frequency of adjustments can vary by policy, but the standard practice is to implement these changes annually. This ongoing adjustment mechanism is crucial for ensuring that individuals who are receiving disability benefits are not financially disadvantaged as time progresses. It's important to recognize that while some riders may not specify the frequency of adjustments in a way that is set in stone, at a minimum, annual increases are common across many policies with a COLA rider.