What is the purpose of a Residual Disability policy?

A Residual Disability policy is specifically designed to provide financial assistance to individuals who experience a partial loss of income when they return to work after a period of total disability. This type of policy recognizes that when a person is recovering from a significant disability, they may not be able to return to their previous level of earnings or work capacity. The policy therefore offers benefits that help to bridge the gap in income, allowing the insured to cover living expenses and maintain their standard of living while they transition back to full employment.

This is particularly important because many people may be able to work part time or take on less demanding roles as they regain their health, but their income may still be substantially lower than it was before their disability. This policy ensures that individuals in this situation receive ongoing support, which can help ease the financial burden during their recovery process.

In contrast, other options focus on conditions that do not capture the essence of what a Residual Disability policy addresses. For example, providing full benefits during total disability does not address the nuances of return-to-work scenarios that a Residual Disability policy covers. Similarly, coverage for medical expenses does not pertain to income replacement, and maintaining insurance coverage while changing jobs pertains to insurance continuity rather than income loss due to disability.