Disability classifications: total, partial, recurrent, and residual

Correct answer: Own occupation

Own occupation treats the insured as totally disabled when they cannot perform the material and substantial duties of their own regular occupation, even if they could work elsewhere. That makes it the easiest definition to meet and the most expensive.

Correct answer: any occupation for which they are reasonably suited by education, training, or experience

Any occupation requires that the insured be unable to perform any job for which they are reasonably suited by education, training, or experience. It is stricter than own occupation because the ability to do a different suitable job defeats the claim.

Correct answer: split (modified own-occupation) definition

A split, or modified own-occupation, definition applies the own-occupation test for an initial period and the stricter any-occupation test for the remainder of the benefit period. It is common in group long-term disability.

Correct answer: Own occupation

Own occupation asks only whether she can perform the material and substantial duties of her regular occupation as a trial lawyer. She cannot, so she is totally disabled even while teaching. Under any occupation, the teaching job would defeat the claim.

Correct answer: a higher premium

Own occupation is the most liberal definition, so it pays more claims and carries a higher premium than an any-occupation policy with the same benefit.

Correct answer: Any occupation

Denying the claim because he can do another job suited to his training is the hallmark of the any-occupation definition. Own occupation would have paid, because he cannot do his own work.

Correct answer: Own occupation

Only a true own-occupation definition keeps paying for the whole benefit period when the insured can work in another field. A split definition does so only for its initial period.

Correct answer: One policy uses own occupation throughout; the other uses a split definition that has moved to any occupation

Same injury, same ability to do other work, different result in year three: the policies differ in their definition of total disability. Own occupation keeps paying; a split definition has switched to any occupation, which the other worker no longer meets.

Correct answer: cannot perform the material and substantial duties of their regular occupation

Florida requires disability income policies to use at least a regular-occupation test for the first 12 months of disability: the person is totally disabled if unable to perform the material and substantial duties of their regular occupation, or the policy must be at least as favorable.

Correct answer: any work or occupation for which they are reasonably qualified or trained

After the first 12 months, Florida lets the insurer predicate continued benefits on the person's inability to perform any work or occupation for which they are reasonably qualified or trained.

Correct answer: Florida requires at least a regular-occupation test for the first 12 months

Florida requires disability income policies to treat a person as totally disabled for the first 12 months if unable to perform the material and substantial duties of their regular occupation. An any-occupation test from day one is stricter than that floor.

Correct answer: perform any work or occupation for which they are reasonably qualified or trained

For a life policy that waives premium or pays on total disability, Florida says the definition may not be more restrictive than the inability to perform any work or occupation for which the person is reasonably qualified or trained.

Correct answer: the inability to engage in most normal activities of a person of like age and sex in good health

For extension of medical benefits, Florida sets different floors: an employee's definition may be no stricter than inability to perform any work they are reasonably qualified or trained for, and a dependent's no stricter than inability to engage in most normal activities of a person of like age and sex in good health.

Correct answer: perform any work or occupation for which they are reasonably qualified or trained

For an employee, Florida says the definition of totally disabled for extension of medical benefits may not be more restrictive than inability to perform any work or occupation for which the person is reasonably qualified or trained.

Correct answer: Loss of sight in both eyes

Presumptive disability provisions typically deem the loss of sight in both eyes, hearing in both ears, speech, or the use of two limbs to be total disability.

Correct answer: She continues to receive total disability benefits even though she is working

Loss of the use of two limbs is a presumptive disability, so it is treated as total disability, and benefits are typically paid even if the insured returns to work.

Correct answer: can perform some, but not all, of the important duties of their occupation

Partial disability means the insured can still perform some of the important duties of their occupation, or can work only part time, but cannot do all of them.

Correct answer: a flat percentage of the total disability benefit, often 50 percent

Partial disability benefits are typically a fixed percentage of the total disability benefit, commonly 50 percent, rather than an amount tied to the insured's actual income loss.

Correct answer: They are paid for a short, limited period, often a few months

Partial disability benefits are usually limited to a short period, often a few months, reflecting their role in helping the insured ease back to work.

Correct answer: 2,000 dollars

Partial disability pays the flat percentage stated in the policy. Fifty percent of the 4,000-dollar total benefit is 2,000 dollars a month.

Correct answer: immediately follows a period of total disability

Many contracts require that partial disability follow a period of total disability; the partial benefit then helps the insured ease back into work.

Correct answer: A flat partial benefit for a limited time

Working part time and doing only some duties is partial disability. Her policy pays that as a flat share of the total benefit for a limited period. Without a residual provision, the benefit is not tied to her actual income loss.

Correct answer: The partial benefit is a flat percentage for a short time, so it may not match the insured's actual income loss

Residual disability pays in proportion to the income actually lost, so it tracks a gradual return to work. A flat partial benefit, often 50 percent for a limited time, may overpay or underpay relative to the real loss and may run out.

Correct answer: The insured can do some duties of her job part time, and the policy pays a set 50 percent of the total benefit

Partial disability combines two features: the insured can do some but not all duties, and the policy pays a flat share of the total benefit. A proportional-to-income benefit is residual; inability to do any duties is total; a same-cause relapse is recurrent.

Correct answer: the insured's loss of income

Residual disability measures the insured's loss of income and pays a proportionate share of the total disability benefit.

Correct answer: (prior earnings minus current earnings) divided by prior earnings, times the total monthly benefit

The residual benefit is the percentage of income lost, (prior minus current) divided by prior, applied to the total monthly benefit.

Correct answer: 1,000 dollars

Her income loss is 8,000 minus 6,000, or 2,000 dollars, which is 25 percent of prior earnings. Twenty-five percent of the 4,000-dollar total benefit is 1,000 dollars.

Correct answer: 4,000 dollars

His loss is 8,000 of 20,000 dollars, or 40 percent, which exceeds the 20 percent minimum. Forty percent of the 10,000-dollar benefit is 4,000 dollars.

Correct answer: Nothing, because a 10 percent loss is below the minimum

Residual benefits usually require a minimum income loss. She lost 1,000 of 10,000 dollars, or 10 percent, which is below the 20 percent threshold, so nothing is paid.

Correct answer: in individual disability income policies for professionals, often added as a rider

Residual disability is common in individual disability income policies, especially those sold to professionals, and is often added by rider.

Correct answer: A residual disability benefit, because it pays in proportion to her actual income loss

A gradual return with slowly rising income is exactly what residual disability handles: the benefit is recalculated from the actual income loss each month, so it shrinks as her earnings recover.

Correct answer: It decreases, because the percentage of income lost is smaller

The residual benefit equals the percentage of income lost times the total benefit. As earnings rise, the loss percentage shrinks, so the benefit shrinks.

Correct answer: a continuation of the original claim

Under a recurrent disability provision, a relapse from the same or related cause within the stated window is treated as a continuation of the prior disability.

Correct answer: 6 months

Recurrent disability provisions commonly use a window of about 6 months after returning to work. A same-cause relapse within that time is the same claim.

Correct answer: Benefits resume without a new 90-day elimination period

The relapse is from the same cause within the six-month recurrent window, so it is a continuation of the original claim: no new elimination period, and the benefit period continues from where it left off.

Correct answer: As a new claim with a new elimination period and a new benefit period

The relapse came after the six-month window, so the recurrent disability provision does not apply. It is treated as a new disability, with a new elimination period and a new benefit period.

Correct answer: continues from where it left off under the original claim

A recurrent disability is a continuation of the original claim, so the benefit period resumes where it left off rather than restarting.

Correct answer: Treating it as the same claim waives a new elimination period but also counts against the original benefit period

Because a recurrent disability continues the original claim, the insured avoids a new elimination period, but the time counts against the original benefit period rather than starting a fresh one.

Correct answer: Residual: how much income was lost? Recurrent: is a relapse close enough in time and cause to be the same claim?

Total asks whether the insured can do their job (own occupation) or any suitable job; partial asks whether they can do some duties; residual asks how much income was lost; recurrent asks whether a relapse is close enough in time and cause to be the same claim.

Correct answer: Residual disability

A benefit proportional to lost income, paid while the insured works, is residual disability.