Disability classifications: total, partial, recurrent, and residual

Correct answer: Own occupation

Under an own-occupation definition the insured is totally disabled when unable to perform the material and substantial duties of their own occupation, even if they could work in another field. That makes it the most favorable, and most expensive, definition.

Correct answer: She is totally disabled and receives the full monthly benefit

Under an own-occupation definition, inability to perform the material and substantial duties of one's own occupation is total disability, regardless of earnings from a different occupation. The dentist cannot practice dentistry, so she is totally disabled.

Correct answer: When unable to perform the duties of any gainful occupation for which they are reasonably suited by education, training or experience

The any-occupation definition requires that the insured be unable to work in any gainful occupation reasonably suited to their education, training or experience. It is the strictest and least expensive definition of total disability.

Correct answer: $1,000

Residual benefit = (prior earnings minus current earnings) / prior earnings x total benefit. ($8,000 - $6,000) / $8,000 = 25%, and 25% x $4,000 = $1,000.

Correct answer: As a continuation of the original disability, with no new elimination period

A recurrent disability provision treats a recurrence of the same or a related condition within a set period after recovery, typically six months, as a continuation of the original claim. The insured does not serve a second elimination period.

Correct answer: Residual benefits are proportional to lost income and can last the full benefit period; partial benefits are usually a flat percentage paid for a short period

Partial disability is duty-based and pays a fixed percentage, commonly 50%, for a short period such as three to six months. Residual disability is income-based, pays in proportion to lost earnings, and can continue for the full benefit period.

Correct answer: Total and irrecoverable loss of sight in both eyes

Presumptive disability provisions treat certain catastrophic, permanent losses, such as total loss of sight in both eyes, hearing in both ears, speech, or the use of any two limbs, as total disability automatically.

Correct answer: Benefits stop, because after two years she must be unable to perform any suitable occupation

A split (modified) definition applies own occupation for an initial period, here two years, and any occupation after that. Once the any-occupation test applies, an insured who can work in a suitable occupation is no longer totally disabled.

Correct answer: His benefits resume without a new elimination period, as a continuation of the original claim

The recurrence came within six months and arose from the same condition, so the recurrent disability provision treats it as the same disability. Benefits resume with no new elimination period, and the remaining benefit period continues.

Correct answer: As a new disability, subject to a new 90-day elimination period

A recurrence outside the recurrent disability window is treated as a new disability, with a new elimination period and a new benefit period, even if it arises from the same condition.

Correct answer: 50% of the total disability benefit

Partial disability benefits are usually a flat percentage of the total benefit, most commonly 50%, paid for a limited time.

Correct answer: The insured's loss of income

Residual disability measures the claim by lost income: the benefit equals the percentage of prior earnings lost multiplied by the total monthly benefit.

Correct answer: He is treated as totally disabled and receives the full benefit, even though he is working

Loss of the use of any two limbs is a typical presumptive disability. The insured is presumed totally disabled and is paid the full benefit even if he returns to work.

Correct answer: Own occupation for an initial period, then any occupation for the rest of the benefit period

A split definition applies the own-occupation test for an initial period, commonly two to five years, and the any-occupation test after that.

Correct answer: None, because his income loss is below the 20% threshold

His income loss is $500 / $5,000 = 10%, which is below the rider's 20% minimum. No residual benefit is payable.

Correct answer: It arises from the same or a related cause as the earlier disability

A recurrent disability provision applies when the later disability arises from the same or a related cause and occurs within the stated period after recovery.

Correct answer: $6,000

His loss is ($12,000 - $3,000) / $12,000 = 75%. Because the rider treats a loss of 75% or more as total disability, he receives the full $6,000 benefit rather than a proportional $4,500.

Correct answer: Any occupation

Any occupation requires inability to work in any gainful occupation reasonably suited to the insured, which is the hardest test to meet and therefore the cheapest.

Correct answer: The insured can work but cannot perform one or more important duties of the occupation, or cannot work full time

Partial disability applies when the insured can still work but is unable to perform one or more important duties or cannot work full time.

Correct answer: $750

Income loss: ($6,000 - $4,200) / $6,000 = 30%, which exceeds the 20% minimum. 30% x $2,500 = $750.

Correct answer: Residual disability

She is working in her own occupation but earning less. A claim measured by loss of income is residual disability.

Correct answer: Any occupation

Social Security disability uses an any-occupation approach, and in an even stricter form than most private policies.

Correct answer: Loss of sight in one eye

Presumptive provisions cover sight in both eyes, hearing in both ears, speech, and the use of any two limbs. Loss of sight in only one eye does not meet the standard.

Correct answer: To balance premium cost against stronger protection in the early years of a claim

Applying own occupation early and any occupation later gives the insured strong protection while adjusting to a disability, at a lower cost than lifelong own-occupation coverage.

Correct answer: Residual: reduced earnings after returning to work

Residual disability is triggered by a loss of income after a return to work. The other pairings mismatch partial, recurrent and total disability with each other's triggers.

Correct answer: As a new disability, with a new 60-day elimination period

The recurrent disability provision applies only to the same or a related cause. An unrelated injury is a new disability with a new elimination period, even if it happens within six months.

Correct answer: Total and irrecoverable

Presumptive disability applies to the total and irrecoverable loss of sight in both eyes, hearing in both ears, speech, or the use of any two limbs.

Correct answer: $1,000

Loss: ($9,000 - $6,000) / $9,000 = one third, above the 20% minimum. One third of $3,000 = $1,000.

Correct answer: An own-occupation definition of total disability

Own occupation pays when the insured cannot perform the material and substantial duties of her own occupation, even if she can work in another field, so it protects a specialized career.

Correct answer: Total disability

Total disability, as the policy defines it, triggers the full monthly benefit. Partial and residual benefits are reduced amounts.

Correct answer: $4,000, the full total disability benefit

Because his 85% loss meets the rider's 80% threshold, he is treated as totally disabled and receives the full $4,000.

Correct answer: An insured recovers from a heart condition, returns to work, and is disabled by the same heart condition three months later

Recurrent disability is a relapse of the same or a related condition shortly after recovery, which the provision treats as a continuation of the original claim.