How to Compare Social Security Disability Insurance with Private Long Term Disability Insurance Plans

• They are both designed to provide long term income assistance. The SSDI program, like those offered long term disability insurance companies, will pay you monthly income benefits over a long period of time if you suffer a covered disability.
• Under certain conditions, your long term disability tax considerations result in zero tax due. While the criteria for determining tax or no tax consequences are different, you may receive disability income tax free.
• Both programs are intended to replace some, not all, of your regular income to cover basic fixed living expenses (food, clothing, shelter, etc.). Benefit levels are calculated to replace basic income lost due to disability for the important expenses of living.

• The definition of a covered disability. From top of the line coverage that specifies that you are disabled until you can return to your specialty (own occupation coverage) to the ability to perform any gainful occupation (any occupation coverage and similar SSDI language), this feature can widely differentiate the programs.
• Amount of long term disability benefit levels. Individual long term disability coverage typically provides from 50% to 70% of your current monthly income. SSDI provides benefits based on your “earnings credits” from jobs you’ve held that were covered by Social Security.
• Long term disability claim submissions and determinations. Most long term disability companies provide for straightforward claims processes while SSDI claim requirements and determinations can appear to be more complex and time consuming. While, on paper, this is merely a minor annoyance, if you are disabled and stressed about meeting your fixed and necessary expenses, this factor can take on much greater importance.