Understanding the Difference Between Long-Term Disability Insurance and Social Security Disability

Long-Term Disability Insurance:

Long-term disability insurance is an insurance policy you purchase to protect yourself and your family in the event you become disabled for a long period of time. In most cases, workers purchase both short-term and long-term disability policies. The long-term disability policy will become effective once the short-term disability policy expires, which is usually within three to six months.

A long-term disability policy will pay you between fifty and sixty percent of the salary you received while you were working. Payment amounts and premiums will vary, as will the length of time that the policy will pay out, so it is important to understand the terms of your particular policy. For example, some policies will only pay for one year, while others will pay out until the age of retirement is reached.

Short and long-term disability policies are usually offered through the individual's employer, however if the employer does not offer policies, they can be purchased from an insurance agent or broker.

Social Security Disability Insurance:

Social security disability insurance, or SSDI, is a government funded disability program. Each individual pays into the program in the form of Social Security taxes. If you become disabled and meet the Social Security Administration's disability requirements, you can begin receiving disability payments after the six month waiting period. The period begins on the date you were determined to have become disabled. In order to be eligible for SSD benefits, you must have earned a certain number of work credits. These credits are earned through each quarter that you work and pay into the Social Security system. The amount of money you receive in Social Security Disability depends on the number of work credits you have earned and how much you earned while you were employed.

In order to qualify for SSD benefits you must also meet the administration's strict definition of disability. This means that you must be able to prove to the social security administration that your disability prevents you from performing any type of work in the national economy.

How Long-Term Disability Insurance is Affected By Social Security Disability Benefits:

It is possible to receive long-term disability insurance and Social Security Disability benefits at the same time. Moreover, some long term disability policies require that you apply for Social Security Disability in order to receive payments. Once you are approved for Social Security disability benefits, the long term disability insurance provider will simply pay the difference between your SSDI payment and your total policy amount. The exact amount they can offset will depend on the terms of your insurance policy and also the amount your receive each month in SSD benefits.

If you have long term disability insurance and are going to apply for Social Security Disability benefits, it may be best to contact a disability attorney to help you understand exactly how your SSD benefits will affect your long term disability payments. They can also help inform you whether or not your long term disability carrier can offset any of the back payment you are entitled to by the Social Security Administration.

It is always important to understand the facts and differences in the various disability programs. This can help you make the most informed decision and help alleviate the confusion of the process.

If you are in need of a Myrtle Beach SC social security disability attorney, Conway lawyer Dirk Derrick at the The Derrick Law Firm has been handling social security disability cases in Myrtle Beach, North Myrtle Beach, and Conway SC for over 23 years. Please call 843-248-7486 today.