What is a Residual Disability Definition and why is it important?
There are some industries where employees are not able to work part time due to physical labour and other industries where employees are a bit harder to keep at home and this usually comes with an extensive University Education. What can happen is an employee who has built up a clientele within their employer’s business or they might be a partner, doesn’t want to stop working when they are ill or injured. I had one client who had a bicycle accident and broke several ribs, collar bone, etc, I lost track of how many bones she broke. They brought her ipad to her hospital bed the next day so she could finish some work she felt only she could do. I have another business owner who had a hospital bed installed in his office so he could continue to run the business. Whatever it takes…
The majority of definitions in your Group Disability Contracts require an employee to be totally disabled during the elimination period. The Elimination Period on a Group Disability benefit is normally 120 days, on an Individual Contract 90 days. The reason for these differences is through Group they follow Employment Insurance Disability which pays for the first 120 days or due to the changes in Employment Insurance 113 Days. With an Individual Disability contract 90 days is the financial point where it starts making sense. A 30 or 60 day Elimination Period is quite a bit more expensive and a 120 day Elimination Period doesn’t offer enough savings, so the majority of contracts go with 90 days. Please note: Not all Individual Disability contracts offer Partial Disability through the Elimination Period, so please read your contract carefully.
RBC Insurance offers a definition through their Group Disability product that is similar to most Guaranteed Individual Disability contracts, and allows an employee to satisfy the elimination period with partial disability. Since the risk increases for the Insurance Company there is a cost that comes along with this definition.
At time of claim, I am always happy to have a claim go through smoothly due to proper definitions in a contract.
Does your Broker understand the definitions in the contract they have sold you? For a review of your Contract Definitions, please contact Glendinning Insurance Services, your Resource Specialist.