Young and healthy workers don’t think about the day that might come when an injury or illness keeps them from working and supporting their family. But it could come at any instant for American employees of any age.
That’s why it’s important to know just what forms of disability payments can help pay your bills if you can’t work.
There are two types: Social Security Disability insurance (SSDI) and private insurance, and they differ in a number of ways. Here’s a comparison.
- If you qualify, payments are decided by a formula that takes into account your work history, age and income. You will always receive less than you earned, and in some cases, up to 90 percent of what you once made, according to The Washington Post.
- You must show you qualify for Social Security Disability (SSD), which means you must show that you can’t work in your previous occupation or do a different type of work, and the disability must prevent you from going back to work for at least 12 months.
- You must be fully disabled.
- You must have been disabled for at least five months before benefits start.
Private disability insurance:
- For about 30 percent of American employees, disability insurance is provided through their work.
- It can be purchased to protect against an unexpected loss of income.
- Receiving benefits often requires a lesser degree of disability, depending on the type of insurance policy.
- It could provide a greater financial benefit than SSD. Some policies cover as much as 70 percent of a worker’s income.
Hopefully, you won’t ever be disabled by injury or illness to the point that you need either SSD benefits or your private insurance to kick in. If you do, however, an attorney experienced in such cases can answer questions or help with the required paperwork. The disability claims process often can present a challenge.