When you’ve become disabled, either temporarily or permanently, you must consider what type of disability payments you should seek so that you can generate an income. Your options include Social Security disability, long-term disability through private insurance, and workers compensation payments.
Worker’s Compensation
If you were injured on the job, you will automatically qualify for workers compensation under most circumstances. However, these payments are only short term and the insurance company will want to settle your case as quickly as possible.
Disability Payment Insurance
Long-term disability payment insurance is another option if you have purchased such a policy. If you carry this type of insurance, you will receive disability payments for a specific period of time or until you are deemed able to return to work. Most policies provide up to five years of continual coverage for any one incident. When this time period is over, the payments will stop.
Social Security Disability
Social Security disability is a federal program that provides benefits to those with a long-term disability. Under their guidelines, the disability must be expected to last over two years. The only exception to this rule is if a person is suffering from a specific disease listed in their guidelines. If you have been diagnosed with any of these diseases you can automatically qualify for the program.
SSD Payments
Social Security Disability payments will be based on how much you have contributed to the program as a working adult. If you are fully vested in the program, you will receive the top payment amount each month. This usually requires at least ten years’ worth of contributions to Social Security taxes.
If you’re a minor or new to the work force, the Social Security Administration has the option of pulling credits from your parents’ accounts to allow you to receive disability payments. This will not impact your parent’s retirement accounts.
Approval Wait Time
Applying for government disability can take time. On average, when a person applies for Social Security disability, it will take at least 18 months before the case is approved. The government will issue retroactive payments dating back to the time you applied, but in the mean time you will need to rely on other forms of income.
If you've been diagnosed with a long term disability, it's important that you begin the process of applying for government benefits as soon as possible. This will allow you to use the benefits from either your long-term disability policy or workers compensation claim to cover your personal expenses until you have been approved for Social Security disability.
