SSDI vs. Long Term Disability Insurance

Social Security Disability Insurance (SSDI), is a payroll tax-funded insurance program administered by the Social Security Administration.  The purpose of SSDI is to provide income to people who are unable to work as a result of a disability until their condition improves.

If a person receives private disability payments, his or her SSDI will not be affected.  However, receipt of other public disability payments, such as worker's compensation, may result in an SSDI benefit usage reduction.

What Is Long Term Disability?

Long term disability insurance protects a worker who becomes disabled and is unable to work for a long period of time.  Long term disability (LTD) insurance kicks in once short term disability insurance, which usually lasts three to six months, expires.  Some employers provide LTD insurance as a part of the benefits packages they offer their employees.  Individual LTD insurance can also be purchased.

Most LTD policies pay an insured between 50% and 60% of their salary.  Additionally, premiums and coverage varies from carrier to carrier. Therefore, its important to compare LTD benefit differences among carriers before purchasing a policy.

SSDI vs. LTD Insurance

One of the biggest differences between SSDI and LTD insurance is in the area of dependent benefits eligibility.  If a recipient of SSDI has dependents under the age of 18, they may be eligible to receive benefits.  Long term disability insurance only pays benefits to the insured.  However, a few LTD policies include a dependent care reimbursement benefit that pays out if the primary caregiver must return to work as a result of the other parent's disability.

Disability Insurance Legal Help

If you have questions about SSDI or long term disability, contact a social security attorney who will explain the various disability assistance requirements to you.  If your claim for SSDI has been denied, you should contact an SSI attorney who can help you file an appeal.