What is a cost-of-living adjustment rider on a disability policy?

A cost-of-living adjustment (COLA) rider increases your monthly disability benefit each year while you are on a long-term claim, so inflation does not erode your income over a claim that might last years or decades. Adjustments are usually tied to the Consumer Price Index (tracked by the Bureau of Labor Statistics) or a fixed percentage, often capped. Without a COLA rider, a benefit that felt adequate at 40 could lose significant purchasing power by 55. The rider adds to your premium, and it only helps if you actually have a long claim, so it is most valuable for younger buyers with decades of working years ahead. Weigh the extra cost against the risk of a lengthy claim in your line of work before adding it.