One thing workers can do to protect themselves against an accident or extended illness is to purchase long-term disability insurance that replaces their lost income. Long-term disability insurance might sound similar to Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI). SSDI and SSI are government insurance programs that provide income to individuals unable to work due to disability.
The most notable difference between SSI and SSDI is that SSDI is only available to individuals who've accumulated sufficient work credits to receive benefits, and SSI is offered to individuals who satisfy a means test that examines their assets. Keep reading to learn more information about receiving private long-term disability benefits and Social Security.
The Need for Long-Term Disability Insurance and Social Security Benefits
You may wonder why long-term disability insurance is necessary if there are government programs designed to replace your lost wages. There are a few reasons you should have long-term disability insurance, even with the availability of SSDI and SSI.
The benefits available under private long-term disability policies tend to be higher than those available under SSDI and SSI. If you're unable to earn an income, you want your benefits to replace as much of your income as possible to ensure you're not financially devastated.
Another reason to have long-term disability insurance is that the waiting period for most private policies is shorter than that for SSDI or SSI. Before you can receive SSDI or SSI, you must be disabled for five months. The waiting period for a private insurance policy varies based on the company, but it's usually less than five months.
Typically, it's easier to get approved for private long-term disability benefits than it is for government disability benefits. It's not uncommon for individuals to wait months or years, or even be initially rejected for benefits, when applying for SSDI or SSI.
Receiving Long-Term Disability Payments and Social Security Benefits
You may wonder if it's possible to double-dip and receive private and government benefits for your disability. The answer to this depends on which government benefits you're eligible for and the terms of your private disability policy.
If you're receiving private long-term disability payments, you'll likely be ineligible for SSI. SSI considers other sources of income when deciding whether to approve benefits. However, it is possible to receive SSDI and private disability payments if you have enough credits for SSDI.
Should you qualify for SSDI, it's common for private insurers to reduce the amount of your benefit payment by a certain amount of your SSDI. For example, if your monthly private disability benefit is $2,000 and you qualify for $1,000 in SSDI, your insurer will reduce your payment by $1,000. Review the terms of your policy to see how yours handles SSDI benefits.
If you need to file a long-term disability claim, schedule a consultation with a local lawyer who specializes in disability claims, such as Iler and Iler, to make sure you file out the papers properly and there are no delays.