Page 136 - Group Insurance and Retirement Benefit IC 83 E- Book
P. 136
After the trial period, the individual would norma1ly either return to work full time and
DI benefits would stop, or, if the trail employment indicates that the individual is unable
to continue working, the full DI benefits would be reinstated without requiring a new
elimination period.
Remember, too, that many insurers pay rehabilitation benefits in the form of payments
for vocational rehabilitation or medical rehabilitative services, whether or not such
benefits are specifically mentioned in the policy. Insurers recognize that helping disabled
insured‘s in this way can reduce the insurance company's outlay in the long run by
making it possible for the individual to become employable again, rather than continuing
to receive DI benefits.
Residual Disability Benefit
Another partial benefit that goes hand in hand with rehabilitation is the residual disability
benefit discussed at length in Chapter Two. When residual disability is covered in a
group LTD plan, the insurer may agree that, if the individual's post-disability earnings are
at least 20% less than pre-disability earnings, a proportionate residual benefit will be
paid.
For example, suppose a disabled employee was receiving $2,000 in DI benefits each
month. He returns to work, but earns 30% less than his pre-disability earnings. The
insurer pays a residual benefit equal to 30% of $2,000 or $600 per month to this insured.
A time limit is placed on the period for which the residual benefit will be paid, often up
to two years as long as the post-disability earnings are reduced. Like the rehabilitation
benefit, a residual benefit encourages the insured to attempt to return to gainful
employment.
Some LTD policies call this a partial benefit rather than residual benefit, although it does
not operate like a true partial disability benefit. These partial or residual benefits are often
foundin-group LTD plans for the best classes of risks-professionals and a few other high-
income earners.
