Residual Rider
What is a Residual Rider?
Residual Rider is the Partial Disability Rider on the Own Occupation (Physician Specific) Disability Insurance contracts.
Amber Explains the Residual Rider
STEP TWO
Select the Residual Rider That is Best For You
Basic
Base Salaried positions tend to not have fluctuations to income so if returning to work as a full-time employee, income would typically be reinstated back to pre-disability earnings.
Enhanced
Production based positions that have a base salary with RVU bonuses and/or incentive bonuses, collection based positions and self employed may not return to work automatically to their pre-disability earnings so an enhanced can help the insured during their transitional to full-time status to allow time to get back to pre-disability earnings.
Commonly the enhanced is the recommendation of choice but it does depend on your specialty and your typical compensation model.
STEP THREE
Learn How the Residual Rider Works
Not all Residual Riders are the Same
See what carriers require 15% or 20% income loss
Know how to calculate the payout after triggering benefits
15%
Currently, these are the carriers that offer a 15% trigger to activate residual coverage:
- Some Residual Riders require a 15% loss of income but no loss of time or duties required.
- Some will require proof of lost time on the job along with the income loss.
- Some of the carriers allow for 50% of the base insurance in the first 6-12 months after you trigger the benefits.
- This can happen after you satisfy your waiting period.
For example:
If you suffer 30% income loss, your residual rider benefit would be = .30 x $10,000 = $3,000 of monthly residual disability coverage.
20%
Currently, these are the carriers that offer a 20% trigger to activate residual coverage.
- Some carriers require a 20% loss of income and that you are able to perform one or more, but not all of the material and substantial duties of your occupation.
- Some of the carriers allow for 50% of the base insurance in the first 6 months after you trigger the benefits.
- This can happen after you satisfy your waiting period.
If you choose the Enhanced Residual Rider,
you have the ability to fully recover and return to work full-time and continue to receive benefits as long as you can prove at least a 15-20% loss of your pre-disability income exists.
If you choose the Basic Residual Rider,
there is no recovery built into the contract. *Standard does still give recovery on either version.*
This comparison does not apply in California because product features may vary.
