Don’t Forget Your Residual Disability Provision

Last summer we got a call from a client’s employee.  He’s a surgeon, and he was having some progressively worsening health issues.  He had surgery scheduled, and he wanted to talk about the process to file a disability claim.

After spending some time with him, it became apparent that his condition had been deteriorating for some time.  He had not only lost some time at work, but he also had seen a slow, but steady decline in his income as surgery became more and more challenging for him.

We reached out to the insurance company and connected with a senior member of the claims team.  We asked if it might be possible to file a claim with a retroactive effective date under the policy’s residual claims provision.  She agreed, and the claim was filed.  After the claim was reviewed, our surgeon was awarded a check for the retroactive claim approval…to the tune of almost six figures!

You won’t always see the word “residual” in a disability contract, but most group and individual disability contracts today have some provision to pay claims for a partial disability.  More often than not, the elimination period, or waiting period, can be satisfied with days of partial disability as well.  This means that employees with progressively declining health might be able to file a claim much sooner than they expect.

Just this past week, I had a similar conversation with an attorney client with slowly deteriorating health.  He was thinking that he had to wait to file the claim, but I think we may be able to explore the possibility of a retroactive claim for him too.

The residual disability provision is a simple concept, but it’s one that’s often forgotten.  It can make a big difference for an employee or individual with a progressive illness.

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