Disability Future Increase Option (FIO)

A Disability Future Increase Option (FIO) is a rider that can be added to a disability insurance policy. This rider allows the policyholder to increase their disability benefit amount in the future without having to go through the underwriting process again.  

Here are some key features of the Disability Future Increase Option:

• Flexibility: With a Disability Future Increase Option rider, policyholders can increase their benefit amount at a future date without having to worry about their health or occupation changing, which could result in a higher premium or even a denial of coverage.
• Convenience: Policyholders can exercise their Disability Future Increase Option without providing additional proof of insurability or going through any medical underwriting process.
• Cost-effective: The option to increase the disability benefit amount in the future through the Disability Future Increase Option rider is generally less expensive than purchasing a new policy later on, especially if the policyholder's health has deteriorated.
• Availability: Some insurance companies may offer a Disability Future Increase Option rider as a standard feature, while others may require the policyholder to pay an additional premium to add it to their policy.

For example, let's say a 30-year-old doctor purchases a disability insurance policy with a $5,000 monthly benefit and a 90-day elimination period. She also adds a Disability Future Increase Option rider to the policy with a 3% annual increase option. After three years, she decides to exercise the option and increases her monthly benefit to $5,150 per month without undergoing a medical exam or providing proof of insurability. This increased benefit amount will be adjusted annually to account for inflation and will be payable after the 90-day elimination period in case of disability.