While Social Security does offer disabled people, and their families, benefits, it can be a long process before you are able to claim disability through Social Security. More than that, even if you are able to get the disability benefits early, they still do not go into effect for at least six months.
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It is almost always in your best interest to purchase a private disability insurance plan for yourself. No one wants to think about the chance he or she may become disabled, but the truth is accidents that result in a disability happen far more likely than one would think.
What does Social Security Cover?
Even when you do qualify for social security disability (or SSI or SSDI) it only pays you a certain percentage of your current income. That amount is usually about a third of your regular income. A 30 year old, for example, who makes $60,000 a year and intends to retire when he or she is 65, would make an estimated $1860 a month on disability. That adds to just over $22,000 a year—a lot less than what he or she is currently living on.
- SSI is Supplemental Security Income and is a program that is financed through tax revenues. Those who are disabled and who do not have a lot of income or personal assets can get SSI until they are able to qualify for Social Security.
- SSDI (Social Security Disability Insurance) is a program that workers pay for in their Social Security taxes. The benefits for SSDI are based on your work history—how long you have worked and what you have made while working.
What is a disability?
The American with Disability Act (ADA) covers American citizens with disabilities, though its list includes only particular disabilities; it does not include every disability that may qualify for its protection. Those with obvious physical disabilities are covered, though others who have less apparent disabilities have more difficulties in getting their disability to be covered.
This is why it is not always the best idea to place all your faith in the Social Security disability system. While it can provide great benefits for those who qualify, including income supplements, health insurance, and access to medications and other services, the wait can be very long. Some have waited years before they have been granted their Social Security disability benefits.
Immediate Benefit of Private Disability Insurance
Someone who has to wait years to get their Social Security disability benefits can lose a lot. You could lose your car, your house, your life savings. This has happened to many people.
Many employers include disability insurance in their insurance packages; these can be helpful to many individuals However, many opt to also purchase their own private disability insurance plans (some opt out of their employers’ disability insurance packages entirely, believing they get a better deal with just the private plan).
These plans come with their own waiting periods, just like Social Security disability does. However, with private plans, once the elimination period is over, the insurance immediately kicks in. These plans will also pay a percentage of your income; this amount is usually between 70% and 80%. Some plans (particularly through employer packages) are lower, while some plans allow you to insure another 10% to 20% on top of whatever is already covered.
Each plan will have its own limitations. Some will cover you up to a certain amount (a lifetime maximum) while others will cover you for a certain amount of time. Short term disability insurance will usually cover you anywhere from 13 weeks to 52 weeks. Several states require employers to provide coverage for at least 26 weeks; others require they provide 52 weeks of disability insurance (short term disability is normally referred to as “sick leave”).
It is hard to find unlimited coverage for any type of insurance, but it is totally possible to insure up to 90% of your income through different plans as well as through supplemental plans. If you make a salary that is over six figures, you may want to consider High Limit disability insurance. Other plans, particularly group plans, will not cover high incomes, so it makes a lot of sense for those individuals to purchase their own private policy, at least to supplement the one provided by their employers.
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