What does Cost-of-Living Adjustment mean? Read on to discover the definition & meaning of the term Cost-of-Living Adjustment - to help you better understand the language used in insurance policies.
A cost-of-living adjustment (COLA) refers to a rider to a disability insurance policy that adjusts the benefits the insured would receive if they were to file a disability claim and the disability persists for over a year. Depending on the terms of the rider, this rider increases your monthly benefit annually by a certain percentage based on the consumer price index.
We hope the you have a better understanding of the meaning of Cost-of-Living Adjustment.