If a medical condition or accident renders you unable to work, there are programs in place that can offer financial assistance: long-term disability insurance and Social Security Disability Insurance (SSDI). The programs are distinct, and depending on your situation, it’s possible that you could draw from both simultaneously.
Long-Term Disability Insurance
Disability insurance is a policy, typically purchased through one’s employer. If your employer doesn’t offer disability insurance, it’s possible to purchase it independently through an insurance agent. It’s sometimes possible to get both short- and long-term disability policies. Short-term disability payouts typically last three to six months, after which long-term disability payouts would begin. Of course, all of these technicalities depend on your particular policy.
Long-term disability insurances typically pay roughly 50%-60% of your salary. Depending on your policy, work duties, insurer, and employer, payouts can vary greatly in amount and length. It’s vital to understand all of the terms of an insurance policy before purchasing.
Social Security Disability Insurance (SSDI)
SSDI is a government-funded disability program, which Americans pay into through their Social Security taxes. The Social Security Administration (SSA) determines who is eligible to receive benefits, and as we’ve discussed in previous blogs, the approval process can be grueling.
There is a five-month waiting period from the date your disability begins until you can begin receiving benefits through SSDI. Monthly benefits are decided based on the amount of work credits you’ve earned throughout your career, and your overall income. Of course, the SSA has strict criteria for approval, and any claimant must prove that they’re incapable of performing any kind of work due to their condition.
Because getting approved for SSDI benefits is such a long process, it can be beneficial to have long-term disability insurance. It’s much easier to get approved for long-term disability insurance benefits, so you can receive disability insurance payouts in the months during which your SSDI claim is processing.
As we mentioned, it’s possible to draw from both programs simultaneously. In fact, some long-term disability policies require that beneficiaries apply for SSDI benefits. Once approved, the insurance provider will pay the difference between SSDI benefits and the insurance policy amount. Importantly, many long-term policies will require repayment for benefits it paid while the person’s disability claim is pending if the disability claim is approved.
The repayment to long-term disability would come from the person’s back pay.
If you currently have long-term disability insurance coverage, contact a disability lawyer before applying for SSDI benefits. An attorney can help you navigate the complicated world of SSDI, explain how receiving SSDI benefits may impact your long-term disability benefits, as well as helping you through the claims process and answering any questions you may have. Contact Molly Burke Law Office today to schedule your free, no-obligation consultation!