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Inflation Protection | COLA | Term Insurance Brokers | Haymarket, VA

Disability Insurance Inflation Protection | COLA | Get Disability Quotes

The inflation option, also known as a cost of living adjustment, on a disability insurance policy is one of the most important parts in deciding how to structure your coverage.  The option you choose will have a big effect on how much your policy’s maximum benefit amounts will grow to in the future.  Even the “small” difference between choosing a 3% or 6% inflation benefit can amount to a difference of hundreds of thousands of dollars over the life of the policy.  Guardian, who offers the best disability contracts in the industry, offers the following COLA options:

-3% compound
-6% maximum compound
-3% compound with a 4-year delay

The 6% compound maximum benefit has a baseline adjustment of 3% per year, but can be up to 6% in the event that the CPI-U adjustment calculation is greater than 3%.  

Let’s look at an example of a physician with a $15,000 maximum per month benefit, with 3% compound versus 3% simple interest to see the difference over many years:

3% compound

Year 1 - $15,000 per month benefit
Year 10 - $20,158 per month
Year 20 - $27,091 per month
Year 30 - $36,408 per month

3% simple

Year 1 - $15,000 per month benefit
Year 10 - $19,500 per month
Year 20 - $24,000 per month
Year 30 - $28,500 per month


To get a quote for a disability insurance policy, please complete the short form below, give us a call at 1-800-571-2980 from 9 AM to 9 PM eastern time, or send us an e-mail at This e-mail address is being protected from spambots. You need JavaScript enabled to view it 24 hours a day.  We can help design a disability policy to suit your personal needs and budget.  Due to the number of factors used to create a disability insurance quote, there is currently no way for us to offer instant online quoting.