Disability Income Insurance: Individual: 101

Most disability income policies provide a method of paying a partial benefit if you are able to do some work, even though you can’t work full time. Such benefits are called Partial Disability or Residual Benefits.

Usually the definition for partial benefits is the same as the definition for total disability but it is changed to read “….you can perform one or more but not all material duties of ……… occupation.”

Many plans calculate the benefit for a partial disability by using a formula, the goal of which is to pay the same percentage of the total disability benefit as the amount of reduction in your income. For example: If you are partially disabled and your income is only 30% of what you used to earn (a 70% reduction in income), the partial disability benefit will pay 70% of what would have been paid in the event of a total disability. If you were supposed to receive a benefit of $3,000 a month, you would receive an amount equal to 70% of $3,000 or $2,100.

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