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SSDI Versus Long-Term Disability Insurance: Comparing Eligibility and Benefits


There are many misconceptions about how disability insurance works, but one of the most common ones is that the Social Security Disability Insurance (SSDI) program and private long-term disability (LTD) insurance are the same. The problem is that it could lead you to believe that you don’t need private LTD  insurance, such as a policy offered as a perk through your employer, because you’re covered by SSDI. If you fall victim to this myth, you’ll probably skip out on long-term disability insurance – only to realize later that it was a big mistake.

The truth is that there are advantages to both, depending on your unique circumstances. A Maryland Social Security disability lawyer can explain in more detail, but you might find it useful to compare the two separate programs.

Primary Difference is the Provider: The key distinction is the entity that provides coverage if you develop a disabling medical condition. SSDI is a program of the federal government, one of several administered by the Social Security Administration (SSA). It’s an insurance policy in the sense that you pay premiums through mandatory contributions from your paycheck. Individuals who are eligible under SSA regulations can obtain monetary benefits by filing a claim.

LTD insurance is a contract between you and a private insurance company that provides coverage. If you qualify according to the terms of the policy, you receive benefits from the insurer. 

Important Factors Regarding SSDI: To qualify for SSDI, you must:

  • Have a medical condition that’s expected to last more than 12 months;
  • The disabling condition renders you unable to work;
  • You’re untrainable in another occupation; and,
  • You’ve accumulated sufficient work credits, which refers to how much you’ve paid into Social Security over the years through your paycheck.

If you do qualify, you might be surprised to learn that your SSDI benefits are quite modest. They’re meant to cover basic living necessities, so you’re not going to receive what you did while working. 

Points to Note About Private Disability Insurance: LTD may offer more coverage than SSDI because it’s intended to replace your income, essentially providing a similar amount to what you’d receive through your post-tax paycheck as compared to pre-disability. Many times, this will be enough for you to enjoy a similar lifestyle. In addition, the eligibility requirements are sometimes more flexible than SSA’s. You could receive benefits through LTD where you would not qualify for SSDI.  However, it is important to review the LTD insurance coverage with a Maryland long term disability lawyer because there are generally limitations that may apply.  These might include limited pay periods and offsets for receipt of other income benefits such as SSDI or part time earnings.  LTD coverage may also exclude disability benefits for pre-existing conditions if you are a recent employee. 

Contact a Maryland SSDI and Long-Term Disability Attorney for More Information 

If you are in a position to apply for SSDI and private long-term disability insurance, it’s essential to work with legal counsel that has in-depth knowledge and experience with both systems. Disability puts you in a difficult financial position, so you want to make the most of the options available to you. Our team at the Law Offices of Steinhardt, Siskind and Lieberman, LLC can advise you on the details, so please contact us for more information. We can schedule a free consultation in our office, or by phone.

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