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How long is disability insurance good for?

Daniel Walker
Licensed Insurance Agent for 15 Years

UPDATED: Mar 19, 2020

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If you are living off of your disability insurance benefits it is a good idea to know the answer to the question: how long is disability insurance good for? The answer depends on whom you are drawing your disability insurance benefits from.

If you are drawing them from private disability insurance then a predetermined time limit such as five years is decided upon before purchasing the policy.

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If you are drawing your benefits from Social Security, you will be reevaluated every year and may continue to receive benefits until retirement, if medically necessary. The following article will provide additional information on disability insurance.

Private Disability Insurance Benefit Time Limits

Private disability insurance is typically obtained through an employer or through a policy you have personally purchased. Private policies will generally cover up to 80% of your salary while you are on disability. No company will pay 100% of your salary because it leaves no incentive to return to work when you are able. Private policies almost always cover more than Social Security and the ability to obtain benefits is much less complicated. This makes private policies more appealing to many people.

The important thing to remember with private disability insurance is that you cannot purchase a policy once you are disabled. You must purchase the policy in case of disability and then you can collect benefits when the disability occurs. Because of the easier access and higher payout amount, private disability insurance can be used on its own or as a supplement to Social Security Disability Insurance (SSDI). However, law does limit how much your combined total from two policies can be.

When a policy is being purchased, a time limit is decided upon before premium payments begin. Standard disability insurance time limits are typically five years.

This is because after five years of permanent disability, Social Security benefits will be easier to obtain and proving your disability will be easier once some time lapses and you have records of consistent payments from a private disability insurance company.

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Social Security Disability Insurance Benefit Time Limits

Social Security disability insurance benefits work much differently than private insurance benefits. Social Security benefits are available to anyone who has paid into Social Security through a job. They become available when an individual becomes either temporarily or permanently disabled. The disability can be due to an illness, accident, or disease.

Applying for Social Security benefits can be tricky and time consuming but if you stick with the process and provide all the required documentations, benefits will be available.

Social Security works hand in hand with Medicare and Social Security retirement benefits since they are all government controlled agencies. With Social Security benefits, you will be reevaluated every year on or near the anniversary of when your coverage began. The reevaluation is meant to determine if your income level or disability level has changed.

If nothing has changed or your situation has become worse, you will be approved for another year. This will continue each year until you reach retirement age and your regular Social Security and Medicare benefits begin.

The main complaint about Social Security disability insurance is that it only covers on average 60% of income. This is where you can combine Social Security and private insurance to cover more of your lost wages. For example, you can purchase a private policy that would cover 20% of your income knowing that Social Security benefits will cover about 60%.

When You Should Purchase Disability Insurance

Each individual must decide if purchasing private disability insurance is necessary. Things to consider are:

  • How many breadwinners there are in the family
  • How many dependents are still in the home
  • How much savings you have, how many assets you have
  • What other sources of income other than your job are available

All of these things, when taken into consideration, should lead you to the conclusion of how your family would or could survive financially, if you become disabled.

There are many private disability insurance companies to choose from and the choice can be overwhelming. One way to narrow down all the choices and to find a good deal on private disability insurance is to compare companies and prices online through the online comparison tool. This free tool gives you access to rates and quotes from top companies so you can view them side by side and find the policy that is right for you.

Try the online insurance quotes comparison tool today!

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