24
Aug

Disability Income Insurance: Social Security/Programs

Social Security will provide benefits to individuals with qualifying
disabilities expected to last at least 12 months. The amount on your
covered compensation, the number of years you have been covered, your
marital and family status, and other benefits you are entitled to
receive under workers compensation or other government programs.

Note that eligibility is based on being unable to perform any gainful
employment, not just the job you were performing at the time the
disability began. Social Security disability payments are taxable if
your income exceeds certain levels.

Workers compensation pays disability benefits if you suffer an
accident at work or an illness that results directly from your
employment. You may be eligible for disability benefits under the
Veterans Administration pension program, as a federal or state
government worker, under a state vocational rehabilitation program, or
if you are a miner covered by the black lung program.

Some states- notably California, Hawaii, New Jersey, New York, and
Rhode Island – provide significant short-term disability benefits for
non-work-related accidents and illness.

Employer-Paid or Sponsored Group Disability Insurance Programs

Most employers allow some short-term leave last from a few days to as
long as six months. In addition, many employers provide long-term
disability benefits. Typical benefits, which usually start three to six
months after the disability begins, replace about 60% of salary and
usually continue for five years, and sometimes to age 65.

The cost of group long-term disability benefits, which usually start
to six months after the disability begins, replace about 60% of salary
and usually continue for five years, and sometimes to age 65

The cost of group long-term disability insurance is generally very
economical, and as such, it is usually fully paid by the employer.
Employer-paid disability income benefits are income taxable when
received, thereby reducing the monthly benefits. Ask your employer for a
booklet describing these benefits and get answers to such questions as
the following:

  • How long must I wait before benefits begin?
  • How long will payments continue during my disability?
  • How will other disability coverage, such as that offered by government programs, affect my long-term disability payments?

-Robert Catalano