What’s The Difference Between Private Disability Insurance And SSDI?

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Most people who don’t rely on public safety net programs like SSDI, SSI, SNAP, and Medicaid don’t know much about these programs. That’s a problem because, not only does it lead to misconceptions about how the “other” lives, but it also means that those who newly need these programs often don’t know what to expect, how to access them, or, most importantly, how limited they are. So, for example, if you were to become disabled, what would your finances look like? You might be surprised.

Social Security Disability 101

If you’ve recently become disabled and can no longer work, the first thing you’re likely to do is look into the available Social Security programs. However, if you had a good job before becoming disabled and, as a result, have a savings account and other major assets, you likely won’t qualify for SSI, which is for low-income disabled individuals. And, while you can still receive SSDI, which is based on work history, you’ll likely be denied repeatedly and will need to hire a lawyer specializing in SSDI if you hope to receive payments.

Poverty Level Income

One of the worst features of SSI, and among the least well-known, is that the program keeps recipients living below the federal poverty line (FPL). Payments from this program are currently capped at about 74% of FPL, which typically isn’t enough to pay for housing, never mind other needs. And forget about finding subsidized, accessible housing; waiting lists for such programs can stretch for years.

Private Coverage

Because federal benefits are so scant – and they’re even harder to access if you have a spouse who can still work –  one of the smartest things that you can do for your future self is to purchase long-term disability insurance. These policies can provide replacement income covering 60-80% of your pre-disability income, which is much more than the paltry federal payments. The exclusion period is also much shorter, meaning you’ll begin receiving payments more quickly.

There is, of course, always the possibility that you won’t need your policy and will have paid into it, but relatively speaking, the benefits are too great to ignore. You can learn more about these policies at https://www.meetbreeze.com/.

Concurrent Payments

Financially speaking, the best situation you can find yourself in is one in which you are receiving various concurrent payments while disabled. For example, you can receive concurrent SSI and SSDI payments if your SSDI payments are not too high. Similarly, you may be able to receive both private and federal benefits, depending on the amounts and circumstances. Be sure to consult with a disability insurance expert and your policy’s terms and conditions to determine the exact payment structure and your legal responsibilities.

A Complicated Web

It’s unfortunate that our public safety net programs for disabled individuals is so complicated and pays so little; rather than making things easier on people who are having a uniquely difficult time or helping them cover the added expenses that insiders sometimes call the “disability tax,” the system can actually be quite punitive.

By learning as much as you can about these systems and investing in supports like private disability insurance proactively, however, you can relieve some of the strain if you ever do find yourself needing these benefits. You’ll be relieved you did.

 

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