Social Security disability insurance, as we frequently point out on this blog, is an important social insurance program which provides those with serious impairments a minimum amount of income so as to support themselves. While the importance of the program is emphasized here, it is also true that it is not wise for most people to rely on such coverage in the event of disability.
One reason for this is that it is not easy to qualify for Social Security disability benefits. The conditions for necessary for approval for SSDI are fairly stringent, and most people who have an impairment or combination of impairments simply will not qualify. In addition, those who do often have to endure significant wait times. For this reason, it is important for us all to have some form of disability insurance.
Disability insurance, of course, is not all the same. There is both short-term and long-term disability coverage, and plans can be purchased either as group or individual policies. The latter have more flexibility in the terms, but involve higher costs. Many people are already covered by an employer and have the option to purchase additional coverage.
Fully understanding the terms of a disability policy is important. One should know whether there are waiting periods, at what level their income will be replaced and for how long, whether there are any limitations in coverage, and so on. Policy terms can vary widely, so don’t assume anything is standard.
Bottom line: Social Security disability coverage is absolutely important, but it really isn’t on the first line of defense when it comes to disability coverage. Better to rely on other coverage for that.
Source: The Consumerist, “12 Things Everyone Needs to Know About Disability Insurance,” Karin Price Meuller, April 16, 2014.