Content Overview
- Summary
- Eligibility
- Probation Period
- Pre-Existing Condition Provisions
- Total Disability Definition
- Elimination Period
- Offsets
- Benefit
- Survivor Benefit
- Partial Disability Or Residual Benefit
- Recurring Disabilities Provision
- Maximum Benefit Period
- Mental And Nervous Limitation
- Other Exclusions And Limitations
- Rehabilitative Training Or Employment
- Waiver Of Premium
- Conversion Privilege
- Insurance Company Financial Situation
- Income Taxability Of Disability Insurance Benefits
Disability Insurance: Long Term: Group
Partial Disability Or Residual Benefit
Next » « Previous10/19
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.