Disability Lawyer Explains the differences between Long Term Disability and Social Security Disability?
Disability is a life-changing event that can have a significant impact on an individual's financial well-being. Fortunately, there are various options available to help disabled individuals maintain a stable income and secure their future. Two of the most common options are long-term disability (LTD) insurance and Social Security Disability (SSD) benefits.
While both of these programs aim to provide financial support to disabled individuals, they differ in several key ways. In this blog post, we'll explore the differences between long-term disability and social security disability to help you understand which program might be right for you.
What is Long-Term Disability (LTD) Insurance?
Long-term disability (LTD) insurance is a type of insurance that provides a portion of your income if you become disabled and can no longer work. This insurance is typically provided by an employer or can be purchased individually. The benefits provided by LTD insurance are designed to help cover the expenses of daily living, such as mortgage payments, groceries, and medical bills.
LTD insurance benefits are typically paid out for an extended period, often up to age 65 or until the individual can return to work. The amount of the benefit is usually a percentage of the individual's salary, typically ranging from 50% to 70%.
What is Social Security Disability (SSD)?
Social Security Disability (SSD) is a federal program that provides financial assistance to disabled individuals who are unable to work. SSD benefits are paid out of the Social Security trust fund and are available to people who have worked and paid Social Security taxes.
To qualify for SSD benefits, an individual must have a medical condition that is expected to last at least one year or result in death. The individual must also be unable to perform any substantial gainful activity (SGA) due to their medical condition. In addition, the individual must have earned a sufficient number of work credits to be eligible for SSD benefits.
Differences Between LTD and SSD
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Eligibility Criteria:
The eligibility criteria for LTD and SSD are different. To qualify for LTD benefits, an individual must have an LTD insurance policy in place. In contrast, SSD benefits are available to anyone who has earned a sufficient number of work credits and meets the other eligibility criteria.
2. Benefit Amounts:
The amount of the benefit provided by LTD insurance is usually a percentage of the individual's salary. In contrast, the amount of SSD benefits is calculated based on the individual's work history and the amount of Social Security taxes they have paid.
3. Duration of Benefits:
LTD benefits are typically paid out for an extended period, often up to age 65 or until the individual can return to work. In contrast, SSD benefits are paid out until the individual is able to return to work or reaches full retirement age (depending on the individual's age at the time of disability).
4. Waiting Periods:
Most LTD insurance policies have a waiting period before benefits are paid out, typically 90 days. In contrast, there is a waiting period of five months before SSD benefits are paid out.
5. Approval Process:
The approval process for LTD benefits is typically faster than the approval process for SSD benefits. It can take several months or even years for an individual to be approved for SSD benefits.
Conclusion
In conclusion, long-term disability insurance and Social Security Disability benefits are two options available to help disabled individuals maintain a stable income and secure their future. While both programs aim to provide financial support to disabled individuals, they differ in several key ways, including eligibility criteria, benefit amounts, duration of benefits, waiting periods, and approval processes.
If you are considering either of these programs, it is essential to understand the differences between the two and determine which option is best suited to your needs. It is also important to note that both programs can be complicated, and it may require contacting a disability lawyer to determine which is best and how both work in conjunction with the other.
