Catastrophic Disability Rider: All You Need to Know

Nobody wants to contemplate the worst-case scenario. However, anything from accidents to illnesses can happen to you, drastically altering your way of living. Because injuries or serious illnesses may render you unable to work, you should take precautions to ensure that the worst does not threaten your future financial stability. If you have disability insurance, you can concentrate on your recovery rather than financial problems. However, disability insurance will not fully replace your paycheck, so it will be better for you to expand your protection by adding riders (extra benefits that the policyholders can buy).

Remember that disability alone may bring about extra expenses you can’t handle with your policy. Here is when a catastrophic disability rider comes in handy. Continue reading if you intend to purchase disability insurance but are unsure whether you require a catastrophic disability rider. This article will teach you everything there is to know about a catastrophic disability rider.

What Is a Catastrophic Disability Rider?

It’s not a secret that catastrophic disability requires additional medical treatment, which might be unaffordable to cover without additional benefits. Here is when a Catastrophic Disability Rider (CAT) rider comes to your rescue. It is an optional rider that the disability income insurance policyholders can purchase for additional costs. CAT pays you weekly benefits in addition to your weekly disability benefits so that you can cover up to 100% of your pre-disability income with this rider.

The claimant has to furnish proof of inability to work due to an accident or illness. Your claim will be met if your case corresponds to the disability definition of the policy:

  • You have a medically proven severe cognitive impairment or loss of mental capacity.
  • You cannot perform two or more Activities of Daily Living (ADLs) without assistance. ADLs are everyday activities (eating, dressing, bathing, toileting, mouth care, continence, and managing medications) essential for personal care and independence.
  • You lose vision in both eyes, hearing in both ears, speech, and use of both hands, feet, or one hand and one foot. The condition must result from illness or injury while the policy is in effect.

Do I Need to Add a Catastrophic Disability Rider?

If you think that catastrophic disability rider comes with high premiums and are in doubt about whether or not you need it, here is what to consider:

The amount of the provided benefit: Many of you look at the cost of the rider, which might be a bit expensive; however, you should compare the advantages and premiums to see whether the rider is worth its price.

Occupation: Mostly, blue-collar workers need to purchase this extra benefit as they are engaged in dangerous labor. Some typical jobs in this category include power distributors, construction workers, and miners.

Lifestyle and preferences: You may be a white-collar worker but fond of extreme sports. So, an office worker who goes skiing should consider buying the catastrophic disability benefit.

Catastrophic Disability Rider Facts

  • CAT riders have an age restriction of 50.
  • The insurers usually place a cap on the CAT benefit amount so that the policyholders can’t get more than their pre-disability income. So, for instance, if your monthly paycheck was $30,000 before becoming disabled, and you get $25,000 for your base policy, the CAT rider will not exceed the $ 5,000 monthly benefit.
  • Like any other rider, the catastrophic disability rider also has the same elimination and benefit periods as disability insurance coverage.

The Bottom Line

Before adding the appropriate riders to your policy, the policyholder should carefully consider all of the riders' details and ensure that the additional premiums are affordable. If you believe the catastrophic disability rider is too complicated to understand, you can seek help from a disability benefits attorney to get covered.