The U.S. federal government estimates one in four adults In Indiana will suffer a disability that will last 90 days or more before they reach age 67. People who become disabled have two choices for income when unable to work: Social Security Disability Insurance (SSDI) and private long-term disability insurance. Is one better than the other?
The differences between SSDI and private disability insurance
All types of disability insurance share some features. All policies have the following:
- Premium
- Waiting period
- Disability definition
- Benefit
- Benefit period
SSDI insurance is part of your Social Security benefits. You pay the premiums through your payroll tax deduction. To qualify for SSDI benefits, workers must have a minimum of 40 credits to become fully insured. The waiting period to begin receiving benefits is five months. The Social Security Administration (SSA) has strict definitions and requirements to qualify for benefits. Individuals must have long-lasting or permanent medical issues, which can often be difficult for them to qualify.
Most people do not have private disability insurance policies, as the cost of premiums is high. However, the younger you are when you buy a policy, the lower your premiums will be. Qualifying for benefits is more accessible, and the benefits are usually higher. Some insurance companies will also modify benefits if your policy works with SSDI benefits.
What happens if my disability claim is denied?
Both the SSA and private insurance companies frequently deny claims for long-term disability. In the case of SSDI, the application process is stringent and missing even a small portion can result in denial. Private insurance companies also unfairly deny claims. When either occurs, applicants can file an appeal for review. If you have both types of disability insurance, you may have to coordinate benefit applications.
Applicants can increase their chances of approval by keeping detailed medical records and thoroughly completing all applications. Note that if you receive SSDI benefits, you must reapply after 12 months. If you file appeals and continue to receive denials but are medically unable to work, you may be able to file a legal claim to receive compensation.