Residual Disability

What Does Residual Disability Mean?

Residual disability refers to a reduction in work performance due to a health condition. Disability insurance compensates for the loss of income resulting from this condition.

Insuranceopedia Explains Residual Disability

To qualify for a residual disability benefit, the insured must still be able to work, but not at the same level or number of hours as before the health condition occurred. If the condition resulted from a job-related injury, workers’ compensation may pay for part of the lost wages on top of any residual disability benefit.

Insurers typically require a significant loss of income for the benefit to be paid. Some companies will only provide payment if the loss of income exceeds 20%. When comparing disability insurance policies, read the residual benefit clause carefully, since the income-loss threshold and how the insurer calculates it can differ from one carrier to another.