February 21, 2008

Don't rely on Social Security Disability Insurance

Though SSDI is an important source of disability income protection, the definition of disability under SSDI is very restrictive. “If” you qualify, you must have significant physical or mental impairments that prevent you from working in any gainful employment activity (In 2004, gainful employment earnings were established at $810 per month) additionally, to qualify for these benefits your disability must be expected to last for at least a year or death. If you know anyone that has gone through this process, he/she will tell you that it isn’t easy and can last months or years to receive a qualifying letter. Meanwhile you must see the state doctors, social workers and administrative personnel, all of which will determine whether or not you can obtain gainful employment. Remember $810 a month can be earned flipping burgers or being a night security guard.

The only way to protect your assets is the coordination of all available disability insurance offering. This combination includes; 1) Your personal disability coverage 2) Your company disability income program (if available) and last 3) Social Security Disability Income.

Many companies provide short term disability benefits; however many do not offer long term coverage options. Although group insurance tends to be less expensive, the contractual language is often very restrictive and offers few benefit options. If you don’t plan on retiring with your employer into your mid or late “60’s”, you may want to use your monthly premium contribution to purchase additional personal coverage. Remember you can’t take your group disability policy to your next employer.

Protect your most important asset – your ability to earn income. A personal disability policy is more expensive, however offers better protection and future benefits if you become disabled, you are unable to return to work fulltime or you can not work in your employment specialty. The cost will average 3% of your income and become much more expensive as you get older. Buy as much as you qualify for while you are younger and working.

As a final note: Long Term Disability is usually caused by a medical illness. Only 10% of all disability claims are due to accidents and less than 4% were from work related “workman’s comp” incidences. To request more information, visit my

* Claim statistics offered by a 2004 Insurance Commission study.