State RegulationsPA specificDifficulty 2/5
An insured returns to work part-time after a disability and now earns less than before. Under Pennsylvania's residual disability rules, which benefit design matches this situation?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
Pennsylvania's residual disability definition at 31 Pa. Code 88.139 covers the insured who returns to work in a reduced capacity and suffers a loss of earnings as a result. The residual benefit design fits that situation: the policy pays a benefit proportioned to the earnings loss while the insured works reduced hours, bridging the gap between old and new income. The Pennsylvania Insurance Department's rules distinguish this from partial disability (31 Pa. Code 88.138), which turns on the duties performed rather than the income lost.
Why the other options are wrong
- A) Waiver of premium only suspends premium payments during disability; it neither refunds them nor replaces salary.
- B) An accidental-death benefit pays on death by accident; reduced earnings from working part-time trigger no such payment.
- C) Guaranteed-insurability options let the insured buy more coverage in the future; they do not respond to a current earnings loss from reduced work.
Memory hook
Back at work but earning less? Residual pays by the slice of income lost.