Residual Disability In a Long-Term Disability Claim

Residual disability in a long-term disability (LTD) claim refers to a situation where an individual is still able to work, but their ability to perform their job duties has been reduced due to a disabling condition. In this context, residual disability benefits may be available to provide partial compensation for the loss of income resulting from the reduced ability to work.

If residual disability benefits are available, the policy may provide for a percentage of the individual’s pre-disability income to be paid out as benefits. The percentage may be calculated based on the difference between the individual’s pre-disability income and their current income, taking into account any other sources of income.

Understanding Total vs. Residual Disability

One of the most confusing aspects of disability insurance policies is the distinction between total disability and residual (or partial) disability.

• Total disability is typically defined as being unable to perform the substantial and material duties of your occupation at the onset of your claim.
• Residual disability, also known as partial disability, is typically defined as being unable to do one or more of the duties of your occupation, leading to a loss of earnings—often 20 percent or more—compared to your pre-disability income.

RELATED POST: Total vs. Residual Disability Claims

When Are Residual Disability Benefits Available?

Residual disability benefits are often available as part of a long-term disability policy. If available, the policy will define the circumstances under which such benefits are payable. In general, residual disability benefits may be available if:

• The individual is able to perform some of their job duties but not all of them.
• The individual’s income has been reduced due to the partial disability.
• The individual is receiving medical treatment or therapy to improve their condition and ability to work.

By understanding these distinctions, policyholders can better evaluate their eligibility for benefits and ensure they receive the compensation they are entitled to if they are only partially disabled.

Examples of Conditions That May Qualify as Residual Disabilities

Residual disabilities can stem from a wide range of medical conditions that limit your ability to perform certain job duties, even though you remain capable of working in a reduced or adapted role. For instance:

• Back or spinal injuries may prevent you from tasks involving heavy lifting or extended periods on your feet, but you may still be able to perform office or desk-based work.
• Carpal tunnel syndrome might restrict your ability to do repetitive hand motions or extensive typing, but allow for less frequent manual activities.
• Chronic illnesses like multiple sclerosis or rheumatoid arthritis can cause fatigue or mobility issues, limiting your work hours or the types of tasks you can manage.
• Heart conditions may keep you from physically demanding jobs, but permit you to handle lighter, less stressful responsibilities.

In these cases, you may not be considered totally disabled, but you still experience a measurable loss of income or work capacity due to your condition.

Examples of Conditions That May Qualify as Total Disabilities

Total disability typically describes a situation where an individual is unable to perform the material duties of their own occupation—or, in some cases, any occupation for which they are reasonably qualified. This can happen as the result of a wide range of medical conditions, many of which significantly impact daily life and work capacity.

Some common examples of conditions that may qualify as total disabilities include:

• Complete loss of vision, making it impossible to work in visually dependent roles.
• Permanent loss of use of hands, feet, or limbs due to injury, neurological disease, or progressive conditions like rheumatoid arthritis.
• Severe cognitive impairment, such as that resulting from a traumatic brain injury or advanced dementia, that disrupts mental functioning needed for most jobs.
• Profound hearing loss that cannot be adequately managed with hearing aids or implants.
• Chronic and debilitating conditions like cancer, advanced heart or lung disease, or paralysis following a spinal cord injury.
• Serious psychiatric or neurological disorders that prevent regular work, such as major depressive disorder or post-traumatic stress disorder.
• Communication disorders, including the inability to speak, which can be caused by stroke, neurological diseases, or cancer affecting the vocal cords.

These are just a few illustrative examples; insurance policies will specify precisely what constitutes a total disability. Often, policies will also consider whether treatment options remain or if maximum medical improvement has been reached.

Complex Issues in Disability Definitions

Disability insurance policies can contain a variety of complicated provisions that impact how—and when—benefits are paid. For example, some policies require a period of total disability before a claimant can transition to residual disability benefits.

In these situations, if you only meet the definition of partial or residual disability from the outset, you might not immediately qualify for any benefits. It’s important to know how your policy defines these stages, as the timing can affect your eligibility.

Another issue arises with lifetime disability benefit riders. Some policies specifically state that collecting residual disability benefits may limit or even end your eligibility for lifetime benefit extensions, which are otherwise available if you remain totally disabled. Understanding how your policy coordinates between residual and total disability—and what happens if you move from one to the other—can help avoid unexpected reductions or termination of benefits.

Carefully reviewing the language in your policy and understanding these definitions is crucial, as insurance companies often interpret them narrowly.

How Insurance Companies May Misclassify Your Disability

Insurance companies do not always classify disabilities in ways that maximize claimants’ benefits. In some situations, an insurer may interpret a claimant’s condition as a “residual” (or partial) disability even when the facts may support a claim for “total” disability under the policy’s terms.

Why does this matter? The distinction is significant because residual disability benefits usually pay out less than total disability benefits. In cases where the policy language is unclear or open to interpretation, an insurer may lean toward a residual disability determination, which can limit your monthly payments and overall compensation.

For example, if a policy is ambiguous about what constitutes total versus residual disability, the insurance adjuster might classify you as only partially disabled—even if you’re unable to perform the substantial and material duties of your occupation. This approach benefits the insurance company financially, as paying residual benefits is typically less costly than paying total disability.

This is one reason it’s so important to read your policy carefully and, if necessary, seek guidance from an attorney familiar with long-term disability claims. An experienced lawyer can help ensure your disability is accurately classified and that you receive the benefits you deserve.

What to Do If Your Disability Is Misclassified

If you suspect that your insurance company has misclassified your disability—labeling you as residually disabled when you should be considered totally disabled—it’s important to act quickly to protect your rights. Insurance policies often contain complex and sometimes unclear language regarding these classifications, which insurers may interpret in their own favor. This can result in lower benefit payments than you’re truly entitled to receive.

Here are some practical steps you can take if you find yourself in this situation:

• Review Your Policy Carefully: Start by reading the terms and definitions in your long-term disability policy. Pay close attention to how “total disability” and “residual disability” are defined and what evidence is required for each.
• Document Everything: Gather and organize your medical records, employment information, correspondence with the insurer, and proof of income loss. The more thorough your documentation, the better equipped you are to challenge the insurer’s decision.
• Consult an Experienced Attorney: Lawyers who focus on long-term disability claims can help you understand your coverage, analyze the insurer’s classification, and guide you through the appeal process. They can also communicate directly with the insurance company on your behalf.
• Don’t Delay: Insurance companies often have strict deadlines for appealing benefit decisions. Acting promptly ensures you don’t miss your window to contest the classification.

By taking these steps, you can put yourself in a stronger position to receive the full benefits you’re owed. A qualified legal professional can clarify your options and champion your claim if your benefits have been reduced by a misclassification.

Steps to Take If You Become Disabled

If you find yourself unable to work at all due to a disabling condition, it’s important to act promptly to protect your financial stability. Here’s what to do:

1. Gather Documentation: Collect all relevant medical records, reports from your healthcare providers, and any workplace documentation that supports your claim of disability.
2. Notify Your Employer and Insurer: Let your employer and your insurance company know as soon as possible about your condition and your intent to file a claim. There are often strict deadlines for filing.
3. Review Your Policy: Carefully read through your long-term disability insurance policy so you understand the coverage, definition of disability, and required forms.
4. Submit Your Claim: Fill out the insurer’s claim forms, attach the supporting documentation, and keep copies of everything you submit. Follow up with your insurance company to confirm receipt.

Getting the process started quickly and following these steps can make a significant difference in how smoothly your claim proceeds and whether you receive the benefits you need.

If residual disability benefits are available, the policy may provide for a percentage of the individual’s pre-disability income to be paid out as benefits. The percentage may be calculated based on the difference between the individual’s pre-disability income and their current income, taking into account any other sources of income, such as Social Security disability benefits.