The Hygienist Who Cut Back Her Hours
Priya, 34, is a self-employed dental hygienist earning $78,000. Two years ago she bought an individual disability policy: $4,500 a month, a 90-day elimination period, an own-occupation definition for the first 24 months and any-occupation thereafter, a five-year benefit period, and a residual disability rider. She now has carpal tunnel syndrome, and her surgeon has told her to reduce her hygiene hours permanently. She is working 60% of her previous hygiene hours (annualized $47,000) and has added ten hours a week of reception work at $22 an hour. At month eight she stops hygiene work entirely but keeps the reception job. Her application, taken by telephone, answered "no" to a question about musculoskeletal conditions in the past five years; in fact she had three physiotherapy visits for wrist pain two months before applying and mentioned it only in passing.
1. What is payable during the first 90 days, and how does the elimination period interact with the residual rider?
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Normally nothing is payable until the elimination period is satisfied, and most contracts apply the same waiting period to the residual rider unless it states otherwise.
Two practical points the agent must flag:
- The elimination period is usually counted in days of disability, which need not be consecutive but must accumulate as the contract defines. Part-time work can interrupt accumulation depending on the wording.
- The benefit period and the elimination period are dated from the onset of disability, so the claim should be filed immediately even though no cheque is expected for three months. Late filing is the most common reason legitimate claims are reduced.
She must also be under the regular care of a physician, which she is.
2. At month four, is the benefit full or partial? Show the arithmetic and state what determines the answer.
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The residual rider pays a proportionate benefit, not a flat amount:
Loss of earnings ÷ pre-disability earnings × monthly benefit.
- Hygiene only: ($78,000 − $47,000) ÷ $78,000 = 39.7%; 39.7% × $4,500 ≈ $1,788 a month.
- Counting the reception income (about $11,400): ($78,000 − $58,400) ÷ $78,000 = 25.1%; 25.1% × $4,500 ≈ $1,131 a month.
The difference turns entirely on contract wording: some residual definitions measure total income before and after disability, some offset income from any source, and some ignore earnings from a different occupation during the own-occupation period. The agent must read the definition and the offset clause rather than assume. Also confirm whether a minimum residual threshold (often 20%) must be met - she clears it on either calculation.
3. At month eight she stops hygiene work but keeps the reception job. What is payable, and how does the pre-application physiotherapy affect the claim?
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Benefit: she is still inside the 24-month own-occupation window. If she can no longer perform the substantial duties of a dental hygienist, many contracts pay the full benefit even though she works elsewhere - but only if the contract has no "no gainful employment" condition and does not offset the reception income. Some contracts instead apply an any-occupation test from day one. The wording decides it; the agent should not promise a figure.
The omission: the application asked about musculoskeletal conditions in five years and she had three physiotherapy visits for wrist pain two months earlier. That is squarely within the question, and it is material to a carpal tunnel claim. Within the incontestability period the insurer can rescind or deny. The path is to correct the record voluntarily and in writing before the insurer discovers it, warn her of the consequences, and never backdate or "clean up" the application. The agent who took the answers by telephone must also be able to show that each question was actually asked and the answer recorded verbatim.