Total vs Residual Disability: There is a huge difference between these two levels of disability, and you should never assume the insurer will qualify you correctly.
Unfair applications of residual disability is yet another byproduct of ambiguous policy language. Disputes over total versus residual disability benefits are among the most contested issues in long term disability insurance claims.
On one hand, insurers stand to save millions if they can justify paying what should be total disability benefits as residual or partial disability benefits instead. Conversely, in proper claims for residual disability, undercalculating payment amounts is an effective money-saving tactic.
Our attorneys will conduct a full analysis of your policy and your claim, so you will know what “disability” really means in your situation under your policy’s terms. We have helped thousands of claimants from diverse professions receive their maximum and appropriate benefits in these matters.
Questions Our Clients Have about Total vs Residual Disability
We understand the devastating loss of earnings that can happen when an insurer wrongfully says you are residually and not totally disabled, or calculates the residual benefit amount improperly. We offer attorney review and assistance in all types of disability claim eligibility issues, including:
- Should You File for Total or Residual Disability?
Before filing a claim, if you wish to continue working and are not sure whether you should claim residual or total disability benefits, we will help you understand exactly what your options are under your “own-occupation” policy and considering your disabling condition.
- You Want to Check the Insurance Company’s Calculation of Your Residual Disability Benefits
Benefits under Residual Disability are paid according to a loss of income calculation. These calculations include many components and can become very complex. If you have already filed for residual benefits and the insurance company has approved, we will review your case to determine if the company is calculating the payment amounts appropriately under the policy. We also monitor ongoing benefit payment amounts.
- Upon Review of Your Claim, the Insurer Says You Are Residually Disabled.
You filed a claim for total disability benefits but your insurer says that you are only residually disabled. Our attorneys will analyze the facts of the claim and the policy provisions. We are able to parse whether you would be able to keep working in some capacity and still qualify for total disability, or whether the insurer has tried to dodge paying total disability benefits in bad faith. In cases where the insurer wrongly denies benefits, we will protect your rights and work to maximize your deserved benefits.
4. The insurance company says you are only eligible for partial disability and has made you an offer to buy out your policy. Should you take it?
Our attorneys will investigate whether the carrier has improperly devalued your claim by forcing an improper designation of partial or residual disability as opposed to total disability, in which any settlement or buyout amount would be egregiously low.
Understanding Residual/Partial Disability
Residual or partial disability coverage protects against loss of income rather than the inability to work.
Benefits begin when an insured suffers a percentage of income loss as stated in the policy that is due to the insured’s condition. A minimum loss of income generally is around 20 percent.
Most private, own-occupation disability policies provide for both total and residual disability coverage. Many ERISA-based group plans sponsored by corporations feature both as well.
High-income professionals and business owners such as physicians, dentists, and CPAs purchase own-occupation policies containing total and residual disability provisions, giving themselves two paths to disability benefits. If disability strikes,
- they may still receive total disability benefits even if they can still perform at least one, or some, but not all, of their specialized or important occupational duties; or
- they may continue working in a lesser capacity, and collect residual/partial benefits.
In some policies, residual disability is a standard feature. In others, it is added to the policy via a benefit rider. Definitions of residual, partial and total disability will vary with each carrier and between policies. The terms residual and partial are usually used interchangeably.
Common Issues We Analyze
- Is the insurance company forcing residual disability in a total disability claim? This inflicts harmful consequences including: (1) drastically reducing the amount of monthly benefits; and (2) an award of residual disability generally cancels out a lifetime disability benefits rider. Insurers often try to treat a lifetime total disability claim as though it were a residual disability claim, thereby limiting a lifetime claim to age 65. Either loss can amount to hundreds of thousands of dollars.
- Does the policy offer you the option to stop working and receive full (total) disability benefits, or continue working (including in another profession) and be eligible to receive a partial benefit to make up for lost earned income?
- Will the policy pay full benefits while you are working in a different profession or occupation?
- Will the policy pay a portion of the benefit or the entire benefit to make up for a salary shortfall between your new occupation and your previous occupation?
- Does the policy require you to be unable to perform one or more (or all) of the material daily duties of your occupation?
- Must you be unable to perform all of the duties of their occupation in a reduced capacity or in a reduced amount of time?
- If the insurance company decides you are residually disabled, how much (if any) will the insurance company pay after offsets such as Social Security Disability?
Example Definition of Residual Disability in an Own Occupation Policy
- A residual disability provision will state that you are unable to perform “one or more” or “some” (or variations thereof) of the substantial duties of your own occupation;
- Your provision may also have a “part-time” element.
- There will be an income loss requirement the must be met as a result of your disabling condition.
- It may include a requirement that you must be under the care of a physician to treat the injury or illness that caused your disability.
- Residual disability benefits are generally payable as long as the disability continues, or up to retirement age. .
Below is an example definition of residual disability containing all of these elements:
‘Residual Disability’ means that due to injury or sickness:
a. (1) You are unable to perform one or more of the important duties of your occupation; or (2) you are unable to perform the substantial duties of your occupation for more than 80% of the time it typically takes to perform them; and
b. Your Loss of Earnings is equal to at least 20% of your pre-disability earnings while you are engaged in your occupation or another occupation; and
c. You are under the regular care of a physician.
d. Benefits are payable up to age 65.
Basically, if you prove a medical condition prevents you from going back to work on a full-time basis, residual/partial disability coverage allows you to return to work doing fewer tasks or work part-time and receive residual or partial benefits.
Keep Control of Your Claim with Help from a Lawyer
Blurring the lines between residual or partial disability and total disability is a common denial tactic practiced by many carriers. Without an experienced disability lawyer by your side, it’s easy to make very costly mistakes.
When you retain our counsel, the insurance company will know that they cannot run over you. Contact us now with any questions you may have regarding your rights to residual or total disability.Once you are collecting disability benefits, your insurance company will require continuing monthly reviews and proof of disability. We provide affordable ongoing legal representation while you are on claim, handling every aspect of maintenance to ensure the insurer finds no reason to deny or terminate continuous payments.