Disability is something that can happen to anyone. Even young people have to concern themselves with the possibility of becoming disabled. If it happens to you, you may need to consider applying for Social Security disability benefits or purchasing your own private disability insurance policy.

Serious medical and mental illnesses happen to people of all ages before they reach the retirement age of 65 years old. Disability insurance keeps these people from losing everything when they can no longer work. The fact is that 25% of people currently aged 20 will be disabled before they reach retirement.

Private Disability Insurance

You have two different types of disability insurance policies to choose from, and they are “short-term” and “long-term.”

Short-Term Disability Insurance

Short-term disability pays you 60% to 70% of your monthly income. This policy is designated for injuries or illnesses that are not going to last longer than one year. In some cases, you must wait two weeks before your insurance company begins to pay your monthly benefits.

Long-Term Disability Insurance

Long-term disability pays 40% to 60% of your monthly salary, and it stops paying after your disability ends. If your disability is permanent, your benefits will end after you reach the age of 65. They may also end after a predetermined number of years. In most cases, you must wait 90 days before your insurance company begins to pay you your benefits.

Disability policies differ depending upon the company. For example, you may be able to purchase a policy that will pay you if you cannot continue to work in your present position. Others will only pay if you cannot take any job, even if it isn’t the job you are currently doing right now. Also, some policies will pay a portion of your benefits if you can still work on a part-time basis.

You can obtain private disability insurance from your employer. In some cases, it is a voluntary benefit. However, in others, the state requires employers to offer this option to their employees. You can also purchase disability insurance directly from an insurance company.

Social Security Disability Insurance

Social Security Disability Insurance is a program that allows you to earn benefits by working and paying taxes to Social Security. You and your family members can qualify for these benefits if you become disabled. Under the Social Security disability program, you cannot receive partial payments like you can with private disability insurance. You also cannot receive short-term benefits.

How Do You Qualify for Social Security Disability Insurance?

You qualify for Social Security Disability Insurance benefits if your circumstances fall underneath the definition of “disability” provided by the Social Security Act. There are a few different conditions that must be met to receive classification as disabled, which include:

  • You are unable to work due to a medical condition that will last at least one year or which will result in your death.
  • You must not be able to perform the job duties that you were performing while you were working.
  • You must not be able to perform the duties of any other job either.

How Much Does Social Security Disability Insurance Pay?

The average monthly payment for a disabled worker in 2019 was $1,234 per month. This is a modest amount that, on its own, does not put a person high above the poverty line, but it helped people pay the bills.

Private vs. Social Security

Not being able to return to your job can be a tragic outcome, however, Social Security Disability Insurance provides the hope of being able to pay the bills. The likelihood of someone under the age of 65 suffering from a career-ending illness or injury is very high. Because of this, the fact that Social Security Disability Insurance exists is a very good thing.

You also have the option to purchase a private disability insurance policy. Between these options, you should be able to find one that will be right for you.

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