Many people believe there’s no difference between social security disability insurance (SSDI) and private insurance. There are major differences. One primary difference is that private disability insurance is offered by large insurance companies who have various limitations and terms. SSDI is a federal program.
SSDI Requires a Claimant to Meet Certain Eligibility Requirements
SSDI is usually available to an injured worker on two conditions. The first condition is the claimant worked long enough to become eligible for their monthly benefits. These benefits are based on the number of work credits they have. These work credits are earned every year provided they make the amount the government requires.
The second eligibility requirement is the worker must be the government’s definition of disabled. This means the worker must be permanently disabled and unable to work any job. Their disability may lead to their death. The Social Security Administration (SSA), which is over the program, will determine if the claimant is able to work any other job. If an individual can work, they are denied disability payments.
Private Disability Insurance is a Contract Between the Worker and Insurer
The federal and state government have nothing to do with whether a worker receives private insurance or not. The worker can receive benefits when they become injured or sick. It is important to note that the worker must meet the insurance company’s definition of disabled to receive money.
Private Disability Insurance May Provide More Coverage
Private disability insurance el cajon ca companies often provide more coverage than SSDI. The eligibility requirements are generally less strict than SSDI too. For example, SSDI requires a worker to be totally disabled for at least one year before they claim benefits. If the worker is only disabled for a short time, they can’t receive SSDI benefits.
Most private disability insurance companies have two disability categories: any or own occupation. With an any occupation, the worker is disabled when they are prevented from performing any duties connected to any type of occupation. This means any occupation they received training, education or are suited to work.
A private disability insurance company may have an own occupation disability. This is any type of disability that prevents them from performing any task in their most recent job. It has nothing to do with a career the worker received an education or training to do.
The Monthly Amounts Received from SSDI vs. Private Disability
The SSDI eligibility is based on work credits a worker pays into the system when taxes are deducted from their paychecks. The monthly amount of SSDI is to meet the basic living needs. It’s not to replace lost income. In 2017, the average monthly SSDI check was approximately $1,171. When added up, that is slightly above the $12,060 poverty rate for 2017.
Private disability insurance pays about 40 to 60 percent of the worker’s pre-disability income. Private disability is designed to replace the amount received after taxes. Every policy is different. So, it is important to compare each private disability insurance companies before obtaining a policy.