• What Is a Residual Disability Income Claim?What Is a Residual Disability Income Claim?

What is a residual disability income claim?

Disability attorney Gregory Dell discusses what a residual disability income claim is. and what a claimant should be aware of before filing a residual disability income claim.

Residual disability is a complicated provision that’s contained in many long-term disability policies. Many people will claim residual disability because of the fact that they’re disabled, yet they continue to work in their occupation. Residual disability is often defined as the inability to perform one ore more duties of your occupation, or it can be defined as unable to perform your duties for the same amount of time as you used to be able to perform them.

An example of how you would calculate a residual disability income would be if you were working 50% of the time you used to work and you’re making 50% of your pre-disability earnings, then you would receive 50% of your benefit because you had a 50% loss of income. So if your benefit was $5,000 and you had a 50% loss of income, you would receive $2,500 a month monthly benefit. Calculation of your residual disability benefit can be complicated because the disability carrier will often ask you for a lot of information. Some examples of things they’ll ask for could be your tax returns for the past five years, your monthly profit and loss statements for the past two or three years, copies of your physician, copies of your production reports, and sometimes they’ll even go as far as asking for bank account statements.

So if you’re considering a residual disability claim, there are lots of issues that you should be aware of and there are often many things that you can do to maximize your recovery under a residual disability claim. The last thing you really need to be aware of with a residual disability claim is that there are many policies that require you to be totally disabled for a certain period of time before you can claim residual disability. If you have any questions regarding a residual disability claim, please contact us at your convenience.

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There are 2 comments

  • Daniel, that is a very good question. To get specific regarding your claim, we would need to see a copy of your governing policy as the language varies from policy to policy. That being said, under most policies, if your income goes down while you are receiving residual disability benefits, then the amount of money the insurance company pays should increase as it is only decreased due to the amount you make from working. If you can get a copy of the policy, please feel free to contact us for a free consultation.

    Alex Palamara May 23, 2020  #2

  • If your work earnings drop due to an external event – COVID – not due to worsened disability – is the company still obligated to increase residual disability benefit during the period of low income, to make up for deficit? Or can they say that since the drop is not specific to the policy holder, or their business, but is economy wide, they are not responsible for the individual policyholder’s drop in income?

    Daniel S. May 23, 2020  #1

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