Recurrent Disability

Most policies provide that if you return to work, but become disabled again within a certain period of time from the same or a related cause, the insurance company will consider you to be still disabled from the original disability and you will not need to satisfy a new elimination period.

Reservation of Rights

When an insurer pays a claim under a “reservation of rights,” it is essentially providing a provisional payment.  Though the insurance company may be sending you a check, it is not admitting that it actually has any liability under the policy.  Instead, it is “reserving the right” to stop paying your claim if it can find evidence to deny it later.  Once the company denies your claim, they can also demand you to repay them whatever proceeds they have distributed to you.

Click here for more information about strategies that insurance companies use to deny or terminate benefits.


Disability insurers are required by state regulators to keep a certain amount of money set aside, or “reserved,” to pay future claims.  Any money required to be kept in a reserve is money that the insurer cannot spend on other things or pay out in dividends.  The amount required to be kept in the reserve is determined by the state, depending on factors like how much the monthly benefit is and how long the claim is expected to last.  If the insurance company is convinced that you are totally and permanently disabled, it may seek to offer you a lump sum buyout so that it can release the money in its reserve to use for other purposes, such as providing dividends to its investor.

Click here for more information about insurance reserves and lump sum buyouts.

Residual Disability

A residual disability rider provides a reduced basic monthly benefit in the event that the insured does not meet the definition of “total disability” under the policy, but nevertheless suffers from a disability that affects his or her ability to work and/or capacity to earn income.  Residual disability benefits are typically provided in cases where the insured returns to work on a part-time or full-time basis, but suffers a loss of earnings.  The insurance company calculates what it believes to be the insured’s loss of income, and then pays benefits on a pro rata basis, based upon its calculations.

Click here for more information about how benefits are calculated under residual disability provisions.


A rider is an amendment that is added to a disability policy in order to expand or limit the policy’s conditions, coverage and/or benefits.

Click here for more information about different types of disability policy riders.