Private Disability Benefits Options You Need to Know
Coping with and attempting to compensate for a disability is a daily reality for millions of Americans, many of which are forced to stop working due to the debilitating effects of these conditions. A large number will turn to Social Security Disability Insurance (SSDI) benefits to find money to support themselves, but SSDI is notoriously known for long wait times to receive approval, which is likely to get worse now that the president instituted a hiring freeze for all civilian federal employees. With the backlog stretching to an average of 526 days for applicants to have a hearing in front of an administrative law judge, where most get approved, everyone who is able to should invest in private disability insurance. Private disability insurance policies are a worthwhile investment for a number of reasons. Claims are processed and approved much more quickly. If a denial is issued, the appeals process is typically less onerous and involves fewer steps than the SSDI system. Most importantly, though, private disability insurance coverage usually offers greater payouts than SSDI, and alternatively, can supplement SSDI benefits, so a higher level of income is possible. However, many people do not understand the advantages of private disability insurance, or that it is even an option. An overview of some additional benefits private disability insurance coverage offers, including benefit options that can enhance the effectiveness of these policies, will follow below.
Advantages of Private Disability Insurance
The biggest drawback to SSDI is the strict definition of disability that all applicants must meet in order to be approved. Specifically, only those unable to return to previous work or adjust to new work for at least one year will qualify. Thus, individuals who are partially or temporarily disabled will be automatically excluded from this insurance program. Private disability insurance covers this gap for individuals in this in-between situation, and almost always offers a much more liberal definition of what is considered a disability so more people qualify. Further, SSDI benefits are calculated based on a person’s average lifetime earnings, which is subject to a cap of $2,639 per month as of 2016. Private disability insurance often pays much more, up to 70 percent for some policies, and is tied to a claimant’s income at the onset of the disability, which can vary widely depending on a person’s age and profession.
Important Benefit Options
Returning to the definition of ‘disability,’ which controls how likely an individual is to be approved for benefits, private disability insurance offers policyholders the ability to select from a number of disability definitions. The three most common include:
- Own-Occupation Coverage – This is the most liberal type of disability coverage and offers benefits for a policyholder unable to perform the duties of his/her occupation. Thus, it does not require the policyholder to seek other types of employment or show total disability to obtain benefits;
- Own-Occupation Coverage with Time Limits – This option gives policyholders the same coverage described above for conditions that affect performance of that person’s job, but only for a limited time (one, two or five years is most common). After this period, most policies convert to an any occupation definition of disability; or
- Any Occupation Coverage – This coverage is substantially similar to the SSDI definition of disability, and requires the policyholder to be unable to perform any type of work to qualify for benefits.
In addition to choosing how strict or expansive the definition of disability is, private policies may also offer:
- an option to choose how long a disability must exist before benefits will be paid. For example, a 13- or 26-week waiting period;
- an annual cost of living adjustment that is almost guaranteed to be higher than that granted by SSDI; or
- a rehabilitation program designed to help disabled individuals determine if a return to previous work is possible, as well as job skills training, job placement and relocation assistance as necessary.
Get Legal Assistance
If you are someone dealing with a disability that will not allow you to work, talk to a disability insurance attorney about qualifying for benefits. Your life is stressful enough, and a firm such as Farrell Disability Law, can take away some of the struggle by handling the approval process and any necessary appeals. Farrell Disability Law represents clients throughout Florida and South Georgia, and can help you get the benefits you deserve. Contact the office for a free consultation.