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Disability Insurance > Articles > Disability Insurance 101 > Catastrophic Disability Benefit Rider

Catastrophic Disability Benefit Rider

Provide Extra Funds During Severe Illness or Injury Funds for Added Flexibility -
A devastating illness or accident can leave you needing extra assistance. The Catastrophic Disability Benefit (CAT) provides extra funds so you’ll have the flexibility to do things such as hire help and pay for items not covered by your health insurance. The CAT option can provide up to 100% income replacement when combined with the base policy benefit and other disability coverage.

Two catastrophic disability riders are offered in Provider Choice, the new disability insurance policy offered through Guardian Life Insurance Company of America's wholly owned stock subsidiary Berkshire Life Insurance Company of America. The riders would pay a benefit in addition to the monthly indemnity amount in the event of one of the following:

If the Enhanced Catastrophic Disability Benefit Rider is selected:



  • A cognitive impairment that requires substantial supervision
  • The loss of two or more Activities of Daily Living (ADL)- bathing, continence, dressing, eating/feeding, toileting and transferring
  • A total, complete and irrevocable loss of sight in both eyes, hearing in both ears, speech, or the entire use of both hands, both feet or one hand and one foot.


If the Basic Catastrophic Disability Benefit Rider is selected:


  • A cognitive impairment that requires substantial supervision
  • A total, complete and irrevocable loss of sight in both eyes, hearing in both ears, speech, or the entire use of both hands, both feet or one hand and one foot.


Since catastrophic disabilities are often permanent- or at least long term-Guardian specifically designed the Enhanced Catastrophic Disability Benefit Rider to include an automatic annual compound 3% increase adjustment to help benefits grow faster and provide greater income protection. When this is combined with the base policy benefit and other disability coverage, the Enhanced Catastrophic Disability Benefit Rider may provide up to 100% income replacement. This is a great way to add additional benefit to your individual disability coverage at a rather low additional premium.

hospital hallwayFor instance, if a CPA making $100,000 bought a new disability policy with a $5,000 benefit and he wanted to add $3,340 Catastrophic Disability Benefit Rider, at a preferred rate the rider would only cost $13.65 per month. This assumes using Provider Choice with generic rates, 90 day elimination period, to age 65 benefit period, $5,000 monthly benefit and $3,340 of Enhanced Catastrophic Disability.

This represents a very good value proposition. Now, we all hope that we never have to collect on our disability insurance policy. However, in the event that we do, wouldn’t it be nice to know that it is possible to significantly increase the benefit (if the disability qualifies under the catastrophic rider too)?

Choose from two strong options:
Enhanced Catastrophic Disability Benefit Rider (Enhanced CAT)– Provides extra funds in the event of a severe disability plus an automatic 3% cost of living adjustment.
Basic Catastrophic Disability Benefit Rider (Basic CAT) – Provides extra funds in the event of a severe disability.
Automatic 3% increase results in extra:
$87,000 after 10 years
$412,000 after 20 years



Please see a sample $5,000 benefit below (not part of the above example):


Enhanced CAT Fixed 3% Compounded IndexingBasic CAT No Indexing Provision
YearMonthly CAT BenefitCumulative BenefitMonthly CAT BenefitCumulative Benefit
1$5,000$45,000$5,000$45,000
2$5,150$106,800$5,000$105,000
3$5,305$170,454$5,000$165,000
4$5,464$236,018$5,000$225,000
5$5,628$303,548$5,000$285,000
10$6,524$672,833$5,000$585,000
15$7,563$1,100,935$5,000$885,000
20$8,768$1,597,222$5,000$1,185,000


Exclusive Stronger Protection Many disability insurance carriers offer a catastrophic benefit. However, we’re the only one with an Enhanced CAT rider that includes an automatic 3% compound cost-of-living increase.

Many people buy long term care insurance to cover expenses related to long term illnesses. The Enhanced Catastrophic Disability Benefit Rider acts similarly to long term care coverage. The extra benefit paid through the rider would help pay the extra costs associated with a long term illness. However, you do not need to use the benefits for long term illness only- you can use the benefit for anything you wish.

Either of the Catastrophic riders would be a very good optional disability insurance rider to add to your policy.



Registered Representative and Financial Advisor of Park Avenue Securities LLC (PAS), 1901 Research Blvd, Suite 400, Rockville, Maryland 20850. Securities products/services and advisory services are offered through PAS, a registered broker-dealer and investment advisor, (240) 683-9700. James Fegan, Financial Representative. The Guardian Life Insurance Company of America (Guardian), New York, NY. PAS is an indirect, wholly owned subsidiary of Guardian.
Financial Balance Group is not an affiliate or subsidiary of PAS or Guardian.

PAS is a member FINRA, SIPC.

The views and opinions expressed herein are solely that of the author and do not necessarily reflect the views and opinions of The Guardian Life Insurance Company of America or its subsidiaries. Individual disability insurance policy Forms 18ID, 18UD, and 18GI underwritten and issued by Berkshire Life Insurance Company of America, Pittsfield, MA, a wholly owned stock subsidiary of The Guardian Life Insurance Company of America, New York, NY. Product provisions and availability may vary by state. In New York: These policies provide disability insurance only. They do not provide basic hospital, basic medical or major medical insurance as defined by the New York State Insurance Department. For policy form 18ID, the expected benefit ratio is 50%. For policy forms 18UD, 18GI, 18UD-F, an 18GI-F, the expected benefit ratio is 60%. Optional riders are available for an additional premium.

2016-22484 Exp 6/2018