Social Security Disability Lawyer Blog

What is Long Term Disability Insurance?

Long term disability insurance is a private insurance policy that you purchase or that is provided by your employer. A long term disability program protects you and your family in the event that you become disabled. Unlike short term disability insurance, which allows you to receive payments for up to six months, long term disability insurance plans provide monthly payments for an extended period of time. The payments in a long term disability insurance plan begin after a specified waiting period.

As of December 31, 2008, 154.5 million workers, over three-fourths of the workforce in the US, are insured for disability benefits through the SSDI program. Only 28 percent of private sector workers in the country are covered by an employer-sponsored long term disability insurance plan. The majority of workers in the US are covered by Worker's Compensation, however, which provides compensation to those who suffer injuries or illnesses in the workplace.

Long term disability insurance plans typically pay you anywhere between 50 and 60 percent of the salary you receive when you are working. Workers typically purchase both short term and long term disability insurance. Some long term policies provide benefits for a maximum of one year, while others will pay you benefits until retirement. If your employer doesn't provide you with long term disability insurance, you can purchase a policy from a broker or insurance agent.

Can You Receive Long Term Disability Benefits and SSDI Payments at the Same Time?

It is possible to receive SSDI payments and long term disability payments at the same time. Typically, the long term disability insurance provider deducts what you get from Social Security from the total policy amount. Many long term disability insurance providers require you to apply for Social Security disability benefits first, however. Some providers may deny your application for benefits if you don't meet the Social Security Administration's (SSA's) definition of disabled and aren't approved for Social Security disability payments.

If you're receiving unemployment insurance, applying for Social Security Disability benefits is contradictory because you're claiming that you're able and willing to work by accepting unemployment insurance. But by applying for Social Security Disability benefits, you're claiming that you cannot perform substantial gainful activity because you're completely disabled. Judges tend to look unfavorably on this and are less likely to consider you disabled and therefore eligible for disability benefits.

That being said, receiving unemployment benefits does not preclude the receipt of Social Security Disability benefits. It is only one of many factors that a judge will consider when determining whether or not you're eligible for Social Security Disability benefits. Some people who receive unemployment insurance are approved for Social Security Disability benefits. It is something that is decided on a case-by-case basis. However, once you're approved for Social Security Disability benefits, you should stop accepting unemployment benefits.

If you decide to apply for Social Security Disability benefits and accept unemployment compensation, keep in mind that the judge may ask you to explain how it is that you cannot perform competitive work if you've asserted that you're willing and able to accept employment through accepting unemployment insurance. Unemployment insurance is meant for people who are actively seeking work and need financial assistance until they find a job. However, many judges understand that people seeking disability benefits need to get some income, so you won't necessarily be disqualified from applying for or receiving Social Security Disability.

Workers' compensation benefits are paid to workers because of a job-related injury or illness. They are paid by federal or state workers' compensation agencies, employers, or insurance companies on behalf of employers. It is possible to get both workers' compensation and Social Security Disability benefits at the same time. In some states, a favorable Social Security decision can even make your workers' compensation case stronger. So, if Social Security determines that you're completely disabled and eligible for disability benefits, you may be able to have your workers' compensation benefits enhanced.

How Workers' Compensation Impacts Social Security Disability Benefits
If you receive workers' compensation and Social Security Disability benefits, the total amount of the benefits cannot exceed 80 percent of your average current earnings before you became disabled. If the total amount exceeds 80 percent, the excess amount is deducted from your Social Security Disability benefits. If your workers' compensation expires, the amounts of your Social Security Disability payments will go back to normal. The offset created by workman's compensation also affects the amount of your disability back pay, or past due benefits.

If you plan to apply for Social Security Disability benefits and have a workers' compensation claim, get a copy of your workers' compensation settlement documents because Social Security will ask for them. Also, be aware that if you receive a lump-sum workers' compensation payment or the amount of your workers' compensation payments changes, you have to notify the Social Security office so they can adjust the amount of your Social Security Disability payments.