You have likely heard about the basics of short-term and long-term disability insurance, but did you know that insurers can also offer policies for workers who suffer some impairments, but are not totally disabled? Here are a few examples of these types of policies:
Partial Disability Benefits
Partial disability refers to a person who can perform some, but not all, of the required elements of his or her job. Partial disability benefits are paid for a shorter time period (usually between three and six months), when an individual suffers an illness or injury and can return to work but in a lesser capacity than before the illness or injury. The partial disability benefit is 50% of the total disability benefit.
Residual Disability Benefits
This kind of benefit offers an alternative to the partial disability benefit, where the benefit is based on the income lost. Instead of offering 50% of the total disability benefit, the insured’s income is reduced by a designated percentage. For instance, if the insured’s earnings were reduced by 30% as a result of a disability, the insured would receive 30% of their usual paycheck in compensation. Since this system operates based on percentage of income, residual disability benefits can be paid regardless of whether the insured is working full-time or part-time.
Recurrent Disability Benefits
Recurrent disability benefits protect employees who return to work after healing from a disability, but become disabled again for the same or a related cause. If the two disabilities occur within certain time period, the insured is still considered disabled from the original disability. In this case, they do not have to wait for the elimination period to pass on the second time they become disabled. Instead, they can start receiving benefits immediately.
It is also important to remember to check your policy’s definition of disability, which will be either own-occupation or any-occupation. As the name implies, own-occupation disability insurance protects an individual, should they not be able to perform the duties of their current job, while any-occupation benefits only kick in if that individual is unable to perform the duties of any job that they would normally be qualified for. Speaking with an advisor can help you find the right policy for you, and ensure that your income remains protected if you become partially or fully disabled.
To learn more about disability insurance or to request a quote, visit our disability insurance page.