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Partial disability describes a situation where an individual can perform some, but not all, tasks required in their job due to an injury or illness.
How an insurance policy defines a partial disability and what it pays in these circumstances matter.
Why do they matter…
- A partial disability is much more common than a total disability.
- When a clinician is disabled under any circumstances leading to a loss of income, it can be stressful. As a result, an individual would want to know how they are protected to make necessary adjustments to expenses. With that in mind, in our experience, many insurance policies do not adequately address a partial disability. Leading to a lack of incentive to return to work when partially disabled.
Read carefully as we aim to address specific questions you need to ask when exploring partial disability insurance policies.
Types of Partial Disability, defined:
Dejargonizing terms underwriters and agents use to explain partial disability.
Temporary partial disability: Occurs after a period when the individual concerned has been out of commission following an incident.
If the individual does not make a full recovery but can return to work, then we categorize them as being in one of these two states:
- Temporary Partial Disability: where an individual can return to work but is temporarily unable to perform all their tasks due to their condition.
- Permanent Partial Disability: where an individual's condition is unlikely to improve, preventing them from performing all their tasks, indefinitely.
Note: A partial disability is a far more likely occurrence than a total disability. Most clinicians (whether a physician or nurse) earn significantly more income under normal circumstances than that through their disability policy. More often than not, in the short term, they want to return to work as quickly as possible, even if they are not 100%.
Your partial disability policy checklist:
A partial disability scenario can be extremely stressful to the individual concerned. The #1 priority is to ensure that the disability policy provides peace of mind.
There are three specific areas you should focus on:
- Trial Work Days - Make sure there are no penalties for going back to work on a trial basis. Often we find physicians will want to return to work prematurely, before the elimination period of their policy is complete. In these circumstances, reviewing the policy language becomes vital.
- Return to Work benefit - The best disability policy will pay the full disability benefits up to the limits of the pre-disability earnings for a period. This can vary between different insurance carriers.
- Definition of Earnings This is important if a partial disability is still prevalent after 24 months. The policy will define benefits using one of two formulas - the ‘proportionate loss’ and the ‘50% offset’ formula. Look for a policy that gives you the best outcome from either of these two formulas - the so-called ‘best of both worlds’.
Tip: Consider a carrier that will pay Return to Work benefits for up to 24 months.
Not all disability policies are built the same. The nuances between policies matter and disability provisions fall into this category. If you are not careful, you risk not being properly protected at times of high stress.
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