If an illness or injury has impacted your ability to work, disability insurance can protect you and your family from financial hardship by insuring a portion of your lost income. Even if you have a disability, you may still be able to work in a limited capacity. In that case, you may qualify for residual disability benefits.

What Are Disability Insurance Benefits?

Disability insurance benefits protect your income if you are injured or become ill and can no longer work. While many employers offer disability benefits to their employees, some do not. Many employer-sponsored disability benefit plans will provide short-term disability benefits (STD) for the first three to six months you are out of work. Then long-term disability (LTD) benefits for those conditions and injuries lasting for more extended periods. LTD benefits are typically payable until you reach retirement age. If you are self-employed, work for an employer that does not offer disability insurance or have disability insurance through your employer. Still, it covers only a small portion of your income; you can also purchase individual disability insurance on your own.

What Are Total Disability Benefits?

If you are disabled and cannot work in any capacity, you may qualify for total disability benefits. Your eligibility to receive disability benefits depends on how your policy defines the term “disability.” Most policies will evaluate your disability based on your inability to perform your own occupation or any other reasonable occupation. Under the own occupation definition of disability, the administrator or insurance company will consider whether you can continue performing the material duties of your most recent job. In contrast, under the “any occupation” definition of disability, you will qualify for benefits only if the administrator or insurance company determines you cannot perform any work. The “any occupation” standard may still be related to other work you can perform based on your experience, education, and training. It may also consider your earnings potential in other occupations compared to what you were earning at your previous job. In addition, it is prevalent for disability insurance policies to include both occupation and any occupation definition of disability. In that case, the policy will typically initially define disability based on your inability to continue to perform your own occupation. Then after a set time (typically between 12 to 36 months), the definition of disability will transition to any occupation standard.

What Are Residual Disability Benefits?

In addition to total disability benefits, many, but not all, disability insurance policies will provide for a residual disability benefit. You may qualify for residual disability benefits if you are partially disabled but still able to work in some capacity. In that case, you will be paid a percentage of the total disability benefit amount you would otherwise be eligible to receive, which will be calculated based on the extent of your disability and loss of income.

How Do I Qualify for Residual Disability Benefits?

Residual disability is generally defined as the inability to perform one or more of the material duties of your occupation or the inability to perform the material duties of your occupation on a full-time basis, accompanied by a corresponding reduction in your earnings. Most disability insurance policies will also require that you experience a minimum loss of income (typically around 20%) in comparison to your pre-disability earnings due to your medical condition or injury.

How Are Residual Disability Benefits Calculated?

Residual disability benefits are usually calculated based on the percentage of your loss of earnings and the benefit amount you would otherwise be eligible to receive if you were totally disabled. The amount you receive each month may fluctuate based on your monthly earnings. You may also need to provide the administrator or insurance company documentation each month reflecting your actual earnings, productivity, and work schedule. An attorney specializing in disability benefits issues can ensure that you have provided sufficient documentation and other evidence to support your residual disability benefits claim and ensure you are receiving the full amount of benefits due under your policy.

If you have been injured or diagnosed with a severe medical or mental health condition impacting your ability to continue working in a full-time capacity, you may qualify for residual disability benefits. The policy terms and claim process can be complicated to understand. The experienced benefits attorneys at DeBofsky Sherman Casciari Reynolds P.C. can help you navigate the complex process of applying for residual disability benefits and representing you in the event your claim is denied. That way, you can focus on your profession and health while still protecting your income and financial security.

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