Increasing Disability Coverage After Training with a Future Increase Option vs Benefit Increase Rider

As a physician in training, the prospect of securing your financial future with true own-occupation disability insurance is a critical step. Disability insurance helps protect your income if an injury or illness affects your ability to work in your specialty. Yet, the income you need to cover as a resident is less than what you’ll need to cover as an attending. How do you increase your coverage after training?

The options that expand your policy’s flexibility can be complex, especially when choosing between the two options to cover that extra income when you become an attending physician: the Benefit Increase Rider (BIR) and the Future Increase Option Rider (FIO).

Both riders enable you to increase your disability benefit as your income grows, but they do so in slightly different ways. Knowing how each works can help you make a choice that best suits your financial future. 

Here’s a breakdown of how the Benefit Increase Rider and the Future Increase Option Rider work, their key differences, and why we generally recommend one over the other.

What is a Benefit Increase Rider?

The Benefit Increase Rider (BIR)—also sometimes known as a Benefit Purchase Option—is an option offered by disability insurance carriers that allows you to increase your benefit periodically as your income grows. However, the carrier holds control over when and how often you can apply for these increases.

Key Features of the Benefit Increase Rider

1. Every Three Years Review
   With the BIR, the carrier will evaluate your situation every three years. If they offer you an increase based on your income or needs, you must decide to accept at least 50% of the offered increase. If you refuse or do not accept at least 50%, this rider will be removed from your policy entirely.
2. One-Time Accelerated Option
   During each three-year period, you also have a one-time accelerated option to increase your coverage if your income jumps significantly (for instance, when transitioning from residency to an attending position) or if you lose group coverage involuntarily. This allows for a faster response to major income changes.
3. Free Rider
   One of the most appealing features of the Benefit Increase Rider is that it’s typically free. You don’t pay extra for this rider, which can be a big advantage during residency and early attending years when budgets can be tight.
4. Principal’s Maximize Your Benefit Rider
   Some insurance carriers, like Principal, offer a variation of the BIR known as the Maximize Your Benefit Rider. This works similarly to the BIR but comes with additional nuances, so it’s crucial to work with an independent agent to fully understand how each carrier’s option operates.

Because the BIR is free and the carrier oversees the timing and offer of increases, it can be an excellent choice for physicians who want reliable benefit growth without extra cost. However, it requires adherence to the carrier’s terms, so you’ll need to stay aware of their schedules and offers. (Any good agent will be on top of this for you.)

What is a Future Increase Option Rider?

The Future Increase Option Rider (FIO) works a little differently. With this rider, you have control over the timing and amount of your benefit increases. Instead of waiting for the carrier to review your case, you can choose to increase your benefit each year at your policy anniversary.

Key Features of the Future Increase Option Rider

1. Annual Opportunity for Increase
   With the FIO, you can apply for an increase every year on your policy anniversary. You don’t have to wait for a three-year cycle, so it allows for more frequent adjustments.
2. No 50% Rule
   Another advantage of the FIO is that you aren’t required to accept a minimum percentage of the increase. Whether you choose to accept 10%, 25%, or 100% of the offered increase is entirely up to you.
3. Paid Rider
   Unlike the Benefit Increase Rider, the FIO is not free. Since the control lies with you and not the carrier, you will pay for this rider. The cost typically reduces over time as you purchase more of the “future increase.” In fact, once you buy the maximum amount available under the rider, the rider’s cost is often eliminated.
4. Participation Limits
   It’s essential to understand that your ability to use the FIO might be limited by participation limits if you already have substantial coverage. For example, let’s say you have a $5,000 monthly individual disability benefit with an additional $10,000 in future increase options, plus group coverage through your employer. You might already be at your maximum participation limit, which could prevent you from accessing the future increase, effectively paying for a benefit you can’t use.

The FIO’s flexibility makes it attractive for some physicians, but its costs and potential limitations on use mean it’s not necessarily ideal for everyone.

Key Differences: Benefit Increase Rider vs. Future Increase Option Rider

Let’s recap the primary differences between the Benefit Increase Rider and Future Increase Option Rider:

 

Feature	Benefit Increase Rider (BIR)	Future Increase Option Rider (FIO)
Who Controls Increases	Carrier controls increases every three years	Policyholder controls increases annually
Minimum Acceptance Requirement	Must accept at least 50% of the increase	No minimum acceptance requirement
Cost	Free	Additional cost
Flexibility	Limited flexibility, carrier determines offer	High flexibility, can apply every year
Accelerated Option	One-time per three years for big income jump	Not applicable (unless you’ve just graduated)
Maximum Participation Limitation	Typically not affected	Potential limitation due to participation cap

Which Rider is Best for Physicians in Training?

At Money Meets Medicine, we typically recommend the Benefit Increase Rider (BIR) for most training physicians. Here’s why:

• Cost-Efficiency: The BIR is generally free, making it a budget-friendly choice, especially during the early years of your career when you might be more financially constrained.
• Automatic Review: You don’t have to track increases on your own each year, reducing the administrative burden.
• Responsive to Big Income Shifts: The BIR’s accelerated option can be valuable when you experience a significant income change, like transitioning from residency to an attending role, or you leave a position and no longer have group LTD coverage.

The Future Increase Option Rider, while flexible, might not provide enough value to justify the cost for every physician. For those in lower-paying specialties or who already have extensive group coverage, the FIO’s cost could outweigh its benefit. 

That said, some physicians may prefer the FIO if they anticipate a need for annual adjustments or want total control over their increases.

Final Thoughts: Choosing the Right Rider to Increase Disability Coverage After Training

When selecting disability insurance riders, it’s essential to understand how each option fits into your career and financial goals. The Benefit Increase Rider and Future Increase Option Rider each have unique features, so there’s no one-size-fits-all answer. 

However, for many physicians in training, the Benefit Increase Rider offers a well-balanced combination of control, affordability, and responsiveness to income changes.

If you’re unsure which option is best for you, our team at Money Meets Medicine is here to help. We understand the unique needs of medical professionals, and we’re dedicated to protecting your insurability, saving you time, and ultimately helping you make the best choices for your financial future.

Let us help you find the right disability insurance rider for your situation so that you can move forward in your career with confidence.

Contact us today to schedule a no-obligation quote, policy review, or consultation. Your career deserves the best protection—let us help you make that happen. Have questions? Email Michael@moneymeetsmedicine.com