Total Disability and Residual Disability in the Context of Long Term Disability Insurance Claims

J.P. Gonzalez-Sirgo
Founder of J.P. Gonzalez-Sirgo, P.A.

The term "total disability" is defined in individual long term disability insurance policies and it can vary from policy to policy.  Three commonly used definitions include own-occupation, modified own-occupation, and gainful occupation. 

Own-occupation is the most favorable definition of total disability for the insured.  If the insured is unable to perform the material and substantial duties of his or her occupation at the time the insured becomes disabled, the disability insurance company will pay the claim even if the insured is working in some other capacity or employment that is not the insured's own occupation.

Modified own-occupation is also referred to as income replacement insurance and is the most widely used definition of total disability in policies today.  Under this definition, a long term disability insurance company will pay the insured's claim if he or she is unable to perform the material and substantial duties of the insured's own occupation and is not working in any other occupation. 

Gainful occupation is the most restrictive definition for insureds and the most commonly used by employer group long term disability insurance policies.  Under this definition, a long term disability insurance company will pay an insured's claim if he or she is unable to perform the material and substantial duties of the insured's occupation, or any occupation for which the insured is deemed reasonably qualified by education, training or experience.

Residual disability is also defined in long term disability insurance policies.  Residual disability is also referred to as partial disability.  This definition can vary from policy to policy.  Two commonly used definitions include loss of income and loss of time/duties.

Loss of income is when the insured has suffered a residual disability but can still perform the material and substantial duties of his or her occupation, but has suffered a loss of income of at least 20%.  The long term disability insurance company will stop paying the claim when the loss of income is less than 20%.

Loss of time and duties is when the insured has suffered a residual disability but can still perform the material and substantial duties of his or her occupation, but has has suffered a loss of time and duties.  The long term disability insurance company will stop paying the claim when the insured is back to working full-time.

It is important to understand how total disability and residual disability are defined in your policy before purchasing such a policy.

You can reach Miami Long Term Disability Insurance Claims Lawyer J.P. Gonzalez-Sirgo by dialing his direct number at (786) 272-5841, calling the main office at (305) 461-1095, or Toll Free at 1 (866) 71-CLAIM or email J.P. directly at [email protected].

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