David, a 48-year-old carpenter in Nova Scotia, suffers a back injury that prevents him from performing some of the physical duties of his carpentry work, but he can still perform lighter tasks for fewer hours. His individual disability policy includes a 'Residual Disability Benefit' rider. How would this rider likely respond to David's situation?

Question: David, a 48-year-old carpenter in Nova Scotia, suffers a back injury that prevents him from performing some of the physical duties of his carpentry work, but he can still perform lighter tasks for fewer hours. His individual disability policy includes a 'Residual Disability Benefit' rider. How would this rider likely respond to David's situation?

Answer options: ✅ It would pay him a pro-rated benefit based on his loss of income or earning capacity due to partial disability.

• It would pay him a full total disability benefit, as he cannot perform his 'own occupation' fully.
• It would deny benefits entirely, as he can still work to some extent.
• It would require him to retraining for a new occupation before paying any benefit.

Correct answer: It would pay him a pro-rated benefit based on his loss of income or earning capacity due to partial disability.

Explanation: A Residual Disability Benefit provides a pro-rata payment when an insured can work but, due to disability, experiences a loss of income or earning capacity, rather than requiring total disability. This is designed for situations like David's partial return to work.