A Disability Annual Renewable Term (ART) Rider is an optional add-on to a life insurance policy that provides disability income benefits in the event the policyholder becomes disabled. Here are the key features of this rider:
• Disability benefit amount: The rider will specify the amount of disability income benefits the policyholder will receive in the event of disability. The benefit amount is typically a percentage of the policy's face value, such as 1% to 2% per month.
• Waiting period: The rider will specify a waiting period, which is the length of time the policyholder must be disabled before benefits are paid. The waiting period may range from 30 to 180 days.
• Benefit period: The rider will also specify a benefit period, which is the length of time benefits will be paid. The benefit period may range from one to five years, or until the policyholder reaches a certain age.
• Definition of disability: The definition of disability in the rider is important to understand as it determines when the policyholder will be eligible to receive benefits. Some policies may define disability as being unable to perform the duties of the policyholder's own occupation, while others may define disability as being unable to perform any occupation.
• Renewability: The Disability ART Rider is typically renewable on an annual basis, meaning that the policyholder can choose to renew the rider each year as long as they continue to pay the premiums.
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