Residual Disability Benefit
A proportional benefit paid when the insured returns to work with a loss of at least 20-25 percent of earnings, keyed to the percentage of income lost, encouraging partial recovery.
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A residual disability benefit in a disability income policy is designed to pay benefits when the insured:
Returns to work but suffers a loss of income because the disability prevents working at full capacity — A residual disability benefit addresses the partial-income situation: the insured returns to work but, because of the disability, cannot earn what they did before, for example a surgeon who can no longer perform surgery or a consultant limited to part-time hours. Benefits are typically proportional to the actual income loss: a 40 percent loss of income produces roughly 40 percent of the total benefit. Residual benefits are broader than older partial disability clauses and are a common rider on quality individual disability policies, encouraging return to work while still protecting the insured's reduced earning capacity.
National insurance concept
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