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Recovery Benefits to Protect Loss of Income


Many of the disabling injuries and illness that lead to disability insurance claims are such that you can eventually recover. You may even regain your full capabilities and be able to return to work as proficiently as you did before your disability.


But even after you recover physically, it may take a little longer to fully recover financially.


For example, if you operate your own business and had to leave for several months, some of your clients may find other providers. It may be months before you replace those lost clients and revive your full income.


The importance of recovery benefits

A recovery benefit will pay a monthly benefit to make up any gaps in your pre-disability income and what you earn after you’ve recovered from total or residual disability.


Most insurance companies include recovery benefits with residual disability riders. A residual or partial disability rider covers you in the event you become disabled but are still able to work in a limited capacity in your current occupation.


How recovery benefits work

Typically in these situations, you may be able to work part time but still lose income because of an injury or illness that restricts you from working full-time.


Carriers that offer both a basic and enhanced residual disability rider may include the recovery benefit on both options or on just the enhanced rider.


It’s important to understand the provisions of your policy’s recovery benefit, including the benefit period available and how much income loss you need after recovery to qualify.


One of the key aspects of recovery benefits is that you have to show your loss of earnings was caused by your disability and not primarily by other intervening causes. Insurance companies reserve the right to re-evaluate whether that relationship continues to exist during the transition or recovery period.



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