How Disability Insurance Relates to Your Work Future from Allsup
Belleville, Illinois — May 1, 2019 — Disability Insurance Awareness Month in May highlights the importance of disability insurance as a financial and economic tool for American workers. According to U.S. Bureau of Labor Statistics data, 42% of workers have access to short-term disability insurance and 34% have access to private long-term disability coverage. More than 155 million workers are insured for Social Security Disability Insurance (SSDI) benefits. Yet many workers still don’t realize the implications for their financial and work futures, according to Allsup, the nation’s premier provider of Social Security Disability Insurance representation services.
According to one study, only 38% of Americans are knowledgeable about disability insurance. Considering one in five Americans report having some type of disability, closing the knowledge gap could lead to improved choices by workers and advantages for the greater economy.
“The worst thing that can happen for some individuals is to totally miss out on the valuable advantages of disability insurance through a misunderstanding of its purpose and role for workers, especially following a disability, when their lives are already upended,” said Steve Perrigo, Allsup vice president. “Many people don’t realize there is a dual purpose to disability insurance: income and then support with returning to work.”
The most common serious health issues in the U.S. leading to work disruption include musculoskeletal disorders, cancer, pregnancy, mental health conditions and injuries like fractures and torn ligaments.
Perrigo answered some of the most common questions and misunderstandings about disability insurance, particularly Social Security Disability Insurance.
Why do I need disability insurance?
The data show that 1 in 4 workers, by the time they reach full retirement age, will experience a disability that prevents them from working. Disability insurance—both public and private—is expressly designed to help workers avoid financial devastation with the lost income when this happens.
What are my options for disability insurance?
Workers can voluntarily choose private short-term disability and long-term disability insurance policies. All or a portion of these typically are paid for by an employer In addition, a majority of U.S. workers already pay for disability insurance through their FICA payroll taxes, with the SSDI program.
Does my income affect my eligibility for SSDI?
No, the SSDI program is a federal insurance plan that is funded through workers’ and employers’ FICA taxes through the same process as your Social Security retirement benefit. Many people make the mistake of thinking this is limited to those in poverty and a type of welfare, when it couldn’t be further from the truth. That’s one of the biggest mistakes some workers make: Not applying for SSDI when they experience an acquired disability, and then losing their insured status because they waited until they were desperate.
What is the meaning of “acquired disability”?
An acquired disability is a condition that has developed during a person’s lifetime as a result of a disease, illness or injury, rather than one with which a person was born.
Does my disability have to be permanent to receive SSDI benefits?
No. A long-term disability refers to the duration of the health condition that prevents work. It may last for one or two years, or 10 years, or be permanent, for example. To qualify for SSDI, a healthy condition must last at least 12 months or longer, or be terminal. It’s possible for individuals to receive SSDI and experience medical improvement and return to work after a few years through the Ticket to Work program.
Does disability insurance replace my work income?
This is a good question and another area of misunderstanding. The purpose of disability insurance is to replace a portion of work-based earnings, not the full amount of earnings someone had prior to a disability. With private disability insurance, policies generally provide 60% replacement value of the person’s earnings. The SSDI monthly payment is based on a calculation by the Social Security Administration (SSA) that includes someone’s history of work-related earnings. In addition, private LTD policies are designed to integrate with SSDI benefits, so that an individual doesn’t end up earning more money than they did while working, which would be a disincentive to work.
Once someone applies for disability benefits, doesn’t this mean they have to quit working for good?
No, not at all. Many private disability policies have provisions to assist someone with returning to work. In addition, once someone is approved for SSDI benefits, they become eligible for Social Security’s free Ticket to Work program. Ticket to Work includes important protections for SSDI benefits so that people can explore working again after they reach medical stability or experience improvement in their health condition. Hundreds of thousands of people have returned to the workforce and become financially independent again after experiencing a disabling health condition.
Can I protect my SSDI benefits if I try to work again?
As mentioned earlier, you have several protections for your SSDI benefits if you want to try to work. By using Ticket to Work and working with an SSA-certified Employment Network, you can protect your SSDI benefits over a span of several years. The program provides phases, including the first nine-month “trial work period” (over 60 months). Additional safeguards allow you to protect your access to SSDI benefits if you find that you are unable to maintain your working status.
Allsup has helped more than 300,000 people receive their SSDI benefits. The online tool empower by Allsup® combines an SSDI assessment for eligibility and Social Security disability application support, along with return-to-work guidance for those who may medically recover. Allsup customers experience a greater than 50% success rate at the application level, compared to the national average of 35%.
Allsup also provides an infographic on, “How Disability Insurance Relates to Your Work Future.”
Find more information about how to apply for disability benefits or returning to work with a disability, visit TrueHelp.com.
Allsup and its subsidiaries provide nationwide Social Security disability, veterans disability appeal, return to work, exchange plan and Medicare services for individuals, their employers and insurance carriers. Allsup professionals deliver specialized services supporting people with disabilities and seniors so they may lead lives that are as financially secure and as healthy as possible. Founded in 1984, the company is based in Belleville, Illinois, near St. Louis. Learn more at TrueHelp.com and @Allsup or download a free PDF of Applying for Social Security Disability Insurance: Getting It Right The First Time.