Social Security Disability Insurance serves as a safety net for those who are unable to work and formally deemed disabled. Paid for by Social Security taxes, benefits allow them to generate income for themselves and their families. Paying in does always mean automatic qualification, as applicants must have a specific number of work credits.
Once presumed to be nearly exclusively the elderly, a surprising statistic reveals that twenty-five percent of 20-year-olds will be disabled for 90 days or more before they reach 67.1 years old.
Confusion has created misconceptions when it comes to SSDI and other forms of disability compensation that include long-term disability insurance (LTD).
The option of long-term disability coverage
SSDI is not the only form of disability income insurance. Because of the multiple options, including LTD benefits, confusion reigns for prospective applicants. Like other disability insurance policies sponsored by the government or covered by insurance companies, they have many things in common.
LTD shares similarities with SSSDI. However, it has a more straightforward qualification process and provides more financial benefits based on the specific policy and particular circumstances. What deters people from taking that option is the cost involved. Yet, the overall premium expense is lower than Social Security self-employed tax.
These plans are based on income earned. A sound strategy can replace up to 80 percent of after-tax income. Higher benefits could create challenges in keeping up premium payments, resulting in a possible lapse. Lower benefits could lead to serious financial problems.
In some cases, protections may not be enough for many workers. Those who are in high-level professional positions or own businesses may not be able to get the protection they need. Policies can be more costly than any-occupation plans. However, for insurance companies looking to compete, tailoring programs and benefits to be more cost-effective are in their best interests.
Premiums and waiting/elimination periods prior to receiving benefits are par for the course for all policies. Qualifying definitions are universal and include disability preventing working in a particular specialty or field or any occupation where the recipient cannot work. Help from an attorney with experience, knowledge, and insight can make a significant difference.