Disability insurance is important when you work in the dental industry because it helps ensure you’re covered in the event of becoming incapacitated.
But what happens in cases when you’re only partially inhibited by an injury or illness? Does your disability policy provide benefits for partial disability, or will there be income gaps?
That’s why it’s generally important to make certain that your policy includes benefits for partial or residual disabilities. Here's some of what you should know about residual disability income insurance coverage for dentists.
Unlike a total disability which results in your inability to practice dentistry, partial disability often results in you being able to see patients on a part time basis and work a reduced number of hours, if you are able to, and still receive partial benefits.
A residual disability benefit rider (also called a partial disability benefit rider) may provide benefits if you are suffering an illness or injury that results in your inability to to work at 100%. This rider should generally be included in your policy to help maintain a certain level of income in the event you suffer a partial disability.
Typically, your partial or residual disability benefits are paid based on your percentage of lost income. For example, if you are partially disabled and suffering a 50% loss of income, you may receive a payment equal to 50% of your total disability monthly benefit. Partial disability benefit payments are calculated on a monthly basis and are typically paid to age 65. The exact lost income requirements vary and you will need to review the policy definitions for the binding terms.
Many residual disability benefit riders also provide for recovery benefits. After a period of total or residual disability, recovery benefits help you transition back to full time work and may pay benefits up until the point that your income is within a specified percentage of your income before the start of the disability.
Depending on your contract, you may find the following criteria to qualify for partial/residual disability benefits.
In many cases, if your partial/residual disability results in an income loss greater than 75%-80%, you may receive 100% of your monthly total disability benefit.
Some insurance carriers automatically include residual disability benefits in their disability policies. However, not all carriers do. That’s why it's important to fully understand what your policy does and does not cover.
If you do not have a policy that includes coverage for partial/residual disability, you should check with your agent or broker in order to discuss the possibility or adding this coverage. Having a disability income insurance policy that provides both total and partial disability benefits is likely crucial to your overall disability income protection plan.
A number of disability income insurance companies offer several partial/residual disability benefit riders from which to choose when configuring your policy. These riders are oftentimes referred to as "basic" or "enhanced" residual disability benefit rider.
"Basic" partial/residual disability benefit riders are less liberal in terms of benefit payments in the event of a partial disability. A greater percentage of income loss may be required under a “Basic” rider to qualify for partial disability benefits. Recovery benefits are oftentimes more limited.
"Enhanced" partial/residual disability benefit riders typically allow the insured to more easily qualify for benefits. The minimum percentage loss of income to qualify for partial benefits may be less than is required under will "Basic." Some policies may not require any income loss during the initial part of the claim which can be difficult to prove early in the claim and pay benefits based on a loss of time requirement. Recovery benefits are typically more comprehensive. In general, enhanced residual disability benefit rider may offer the client a more robust benefit in the event of a partial or residual disability.
As a dental practice owner, it's critical to protect your ability to earn income with robust insurance coverage for the unexpected. A residual disability can drastically cut into your ability to practice dentistry, but leave you unable to qualify for traditional disability benefits.
A residual disability benefit rider can provide you with the protection your practice needs in the event that you become residual disabled.
At Treloar and Heisel, we understand the importance of insurance policies for practice owners, dental associates, and assistants. Contact us today to learn more about residual disability benefits, or download our free eBook, Guide to Disability Income Insurance. Get your copy here.
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This information is intended for general informational purposes only. Please review your policy contract for the binding policy terms and definitions, as they may vary. Please consult with your licensed insurance professional.