You are here: Home Partial Disability Or ...
Information about all aspects of finances affected by a serious health condition. Includes income sources such as work, investments, and private and government disability programs, and expenses such as medical bills, and how to deal with financial problems.
Information about all aspects of health care from choosing a doctor and treatment, staying safe in a hospital, to end of life care. Includes how to obtain, choose and maximize health insurance policies.
Answers to your practical questions such as how to travel safely despite your health condition, how to avoid getting infected by a pet, and what to say or not say to an insurance company.

Disability Insurance: Long Term: Group

Partial Disability Or Residual Benefit

Next » « Previous

10/19

Some long term disability policies pay a partial benefit if you are able to do some work, but are unable to work full-time.

Usually the definition of "partial disability" is the same as the definition of total disability but it is changed to read "….you can perform one or more but not all material duties of ……… occupation." (For information on the definition of total disability, see: Total Disability Definition, above)

The amount of the benefit for partial disabilities is usually determined by a complicated formula. The goal is to pay a percentage of the total disability benefit that reflects the amount of reduction in your income.

For example: David is partially disabled. He is only earning 30% of what he used to earn (a 70% reduction in income). The partial disability benefit will pay 70% of what David would receive if he were totally disabled. So, if David's salary was $3,000 a month, and he would have received 60% of his salary if he were totally disabled, he would receive 42% (70% of 60%) or $1,260 for being partially disabled. When you add back the 30% he is still earning ($900) to the $1,260 he receives from the long term disability insurance company, he is receiving $ 2,160. If he were totally disabled he would receive only $1,800, 60% of $3,000.

This gets even more complicated if you have been on total disability for several years since most formulas will adjust your old income for inflation.


Please share how this information is useful to you. 0 Comments

 

Post a Comment Have something to add to this topic? Contact Us.

Characters remaining:

  • Allowed markup: <a> <i> <b> <em> <u> <s> <strong> <code> <pre> <p>
    All other tags will be stripped.