Residual Benefit Law and Legal Definition

In disability insurance, a benefit paid when the policy holder suffers a loss of income due to a covered disability or if loss of income persists. The residual benefit is calculated on the basis of a formula specified in the insurance policy. Generally, it is a percentage of the assured total benefit, such as 20%. In certain circumstances, some of the best insurance policies may offer a flat dollar minimum, payable even if the loss is less than 20% of pre-disability income. This residual benefit may be paid up to the extent of maximum benefit period.