Relationship of Social Security Disability and Long-Term Disability Insurance

Unexpected events happen to people all around the world every day. You don't plan on it, but it affects you nonetheless. If you happen to get seriously injured, physically ill or develop a condition that limits your ability to perform normal duties, then you may not be able to work anymore. Sadly, workers' compensation may not be able to cover you if you were injured or got sick outside of the workplace. What do you do then?

The Social Security Administration offers benefits to such people called Social Security Disability (SSD). but you may not be qualified for SSD benefits, so an individual may wish to purchase long-Term Disability insurance (LTD) privately or through their employer if it's offered. Social Security Disability claims and long-term disability insurance have a complex relationship. Consult with a Florida disability lawyer at the Coye Law Firm today for more information, regarding the different between the two.

 

Social Security Disability vs. Long-Term Disability Insurance

Long-term disability is an insurance policy that you might potentially "shop" for like you would most other types of insurance policies: auto insurance, health insurance, etc. Depending on the policy, they will usually pay for 50%-70% of your salary, and it may pay anywhere from 5 to 10 years or until you reach the age of 65. Wouldn't it be nice to receive both Long-Term Disability and Social Security Disability benefits at the same time?

It would, but sadly, it's usually not the case. Your LTD will actually change and possibly decrease based on whether or not you were approved for SSD benefits. For example, in a hypothetical situation, if your LTD benefits were $1,200 and your SSD benefits (which you were approved for) were $1,000, your LTD would only pay $200.

The problem is that Social Security Disability is a program, which you can be qualified for, while long-term disability is an actual insurance plan that you pay for. Why should they withhold the benefits that you are entitled to (and paid the services for) just because you qualified for a government-funded program?

 

Long-Term Disability Requirements

In fact, most LTD provisions actually require that you fill out a social security disability application, as well. The reason is simply because if you are approved, it will lower their chances of having to pay out entirely. Insurance companies are still a business, and they are in it to make a profit. You should also be aware that if your long-term disability policy requires you to apply, it's possible that they will deny your benefits altogether if you fail to apply for Social Security Disability at all.

But if your long-term disability insurance doesn't require you to apply for Social Security Disability, you may want to consider avoiding any attempts your employer or insurance company makes to encourage you to apply for it. They may try to refer you to a service that will help you apply. Whether you're approved or denied, you may risk offsetting your LTD benefits.

The relationship of Social Security Disability and long-term disability insurance is tricky. Approval for SSD may affect your LTD benefits. Speaking with an experienced disability lawyer may give you the opportunity to talk about the differences and relationship of these two forms of disability insurance. Speak with one of the Central Florida disability attorneys at the Coye Law Firm today for legal counsel and help. Call 407-648-4940.