why purchase disability insurance when...

[happyscooter]

you can get SSDI if you can't work? At a job I was at a few years ago, the employees were offered AFLAC, paid by the employees. One girl did not take it, could not afford it. About a year later, she was diagnosed with 'something terminal'. She filled out the SSDI forms, the doctor signed it and in 6 months she was gone, sitting at home-being a SAHM, no cost to her. Any reason someone would pay for a policy when you can get it for free?

[midjd]

Because SSDI is rarely enough to live on... I use to work in the SSI/SSD unit of NYLS and the MAXIMUM award I ever saw was about $800/month. Our 1br, 600sf apartment an hour from the city was $1100/month. So I'd rather have a policy that replaced X% of my salary (particularly if I were a high earner) rather than one that pays out what the government has determined is reasonable.

Not to mention that you nearly always have to appeal an initial denial... sometimes multiple appeals. Meanwhile the bills are piling up. It can take a year or more to see any money.

[happyscooter]

But wouldn't it come out to the same amount since SSDI isn't taxed? Or is it? And by the time you factor in not paying for gas or day care, you really come out ahead.

[midjd]

It can be taxable if it exceeds a certain amount per year... not sure of the exact number anymore.

I am not a particularly high earner ($55K) and my STD will pay 80% for 2 years, after a 30-day waiting period... so say $35K after taxes. Tight, but livable.

With SSI, I *might* get $10K/year, after fighting it out with the SSA for 12-18 months. I'm frugal, but there is no way I could live on $10K a year - particularly when you factor in medical costs of whatever my disability may be.

If you were a minimum wage worker, it might not make much difference... but I'd say anyone making more than $25K/year would be better off with their own disability policy.

[Gardening Grandma]

I had disability coverage through my employer. It paid my full salary for six months, then 1/2 my salary for the next six. After a year, if I were still disabled, I'd qualify for a disability retirement. SSDI would not have come even close.

Besides, SSDI is one of those budget items that the states are considering cutting.

[Deleted]

If social security will replace the full or close to it amount you were making before having to file for disability than yes there is no need for it. But that is one of the advantage of being low income:
- unemployement/disability will be replaced by the government if you were to need it and it will be close to the amount you were making before.

Also have to consider if you are single or married. If I were to get disabled as a single person I could:
- file for disability
- file for section eight or low income housing
- file for EBT

But since I am married, they take both income into consideration and in NYS my wife income alone is too much for us to qualify for low income housing let alone section 8, and forget EBT. So yes as a two earner income we would be hit hard if we could only replace 1/4 of my net income; so for us it is worth it to carry disability insurance

[❤ mollymouser ❤]

Your annual SS statement used to sday what you'd receive in disability (if you were eligible) ~ not sure if it still does that.

[Deleted]

Jun 7, 2011 11:16:22 GMT -5 ❤ mollymouser ❤ said:

Your annual SS statement used to sday what you'd receive in disability (if you were eligible) ~ not sure if it still does that.

Yes it does which is why I know we both need need disability insurance.

For me it would cover about 1/5 of my current net income and for my wife it was way less since she only started working full time this past september

[midjd]

I'm in the same boat as Cawaiu's wife... I've worked at least PT since 2000, but never netted more than $5K per year or so until 2009. My potential benefits are something like $150/month

[Deleted]

Jun 7, 2011 7:22:37 GMT -5 happyscooter said:

you can get SSDI if you can't work? At a job I was at a few years ago, the employees were offered AFLAC, paid by the employees. One girl did not take it, could not afford it. About a year later, she was diagnosed with 'something terminal'. She filled out the SSDI forms, the doctor signed it and in 6 months she was gone, sitting at home-being a SAHM, no cost to her. Any reason someone would pay for a policy when you can get it for free?

How do you make her having something terminal sound like a character flaw?

[commentator]

Jun 7, 2011 7:51:26 GMT -5 happyscooter said:

But wouldn't it come out to the same amount since SSDI isn't taxed? Or is it? And by the time you factor in not paying for gas or day care, you really come out ahead.

Neither are disability insurance distributions if the recipient paid the premiums him/herself.

[commentator]

Jun 7, 2011 12:22:18 GMT -5 @justaposter said:

How do you make her having something terminal sound like a character flaw?

By putting it in quotes.

[DVM gone riding]

I did tell someone that they should rethink LTD ins because the didn't MAKE more then what SSI generally pays as a BARE min. in my case I make 75k and my LTD ins pays up to 60% so 3700/mos SSI will come no where near that. just depends on your salary and what you can get as benefits few pay over 70% none pay 100% they want you to have incentive to go back to work if you can. Mine also pays if I can't work MY job where SSI only pays if you can't work ANY job (or at least close to that qualification) also my insurance company is easy to work with.
SSA isn't u almost always have to get a lawyer.

[formerexpat]

But wouldn't it come out to the same amount since SSDI isn't taxed? Or is it? And by the time you factor in not paying for gas or day care, you really come out ahead.

Neither would benefits from a policy that was paid for by the employee. SSDI can be taxed, up to 85% of the benefits, depending on what total household income is.

And as midwest has said, it's limited. My mother's is $1k per month.

LTD will supplement this with the amount you've signed up for. Most policies are written so that the benefits they pay you are decreased by the amount of your SSDI - i.e. if you've got a $3k a month policy but SSDI is paying your $1k, then the insurance company will pay you $2k per month.

My policy, also paid by me via work, covers 60% of my gross salary. The benefits are tax free. I don't want to have to worry about significantly decreasing my lifestyle, or even forcing my wife to work should I become disabled.

It is beneficial for the employee or person to pay the premiums because if the company pays for your premium, then the benefits are taxed. Much better to get a 60% policy that you pay the premiums on through your employer than your employer paying the premiums and you being taxed on the benefits.

[TheOtherMe]

I am the representative payee for a woman who receives SSI. She gets $674 per month, Section 8 housing and food stamps. Money is really tight for her. She can't have more than $2K of money in her checking account at any one time.

I would hope I don't have to ever live like that. When I first took her on, she was on the Section 8 waiting list and paying market rent. That left her $40 per week to live on. Her apartment is in a horrible area of town and she tells me it often doesn't have hot water.

If you have an employer who offers disability insurance, get it. You don't want to walk in her shoes.

[schildi]

Jun 7, 2011 7:22:37 GMT -5 happyscooter said:

Any reason someone would pay for a policy when you can get it for free?

My policy would pay 65% of my pay. That's many times the amount SSDI would pay.

[cronewitch]

If she was more disabled she might not be able to take care of a home and children. SSDI would pay me the same as collecting SS retirement at 66 so around 1,800 a month but I am old. Since I am old I have a life savings to fall back on and rental income and things so it is plenty for me. If I was young, renting at market rates and trying to save for my future while raising children I would want much more than 1,800 a month, but might get much less since I was earlier in a career and might have debt.

The children get SSDI if a parent does so that is some help and if the disable parent can take care of the children it helps too. My coworker has two children with a disabled man so they get 3 SSDI payments and he is able to single handedly raise the kids. He lost the use of one arm but can pick one kid at a time. He can't take both of the little ones on a bus and deal with diaper bags and things so she has had to go help take them to the doctor once. He accidently picked up a kid by the arm to remove it from danger and dislocated the shoulder. They don't own a car so doctor and things are all bus trips.

[happyscooter]

Her 'terminal illness' doesn't mean that she will die from it. It isn't like stage 4 brain cancer. I didn't mean to imply that she had a character flaw.

[adela76]

Jun 8, 2011 6:19:24 GMT -5 happyscooter said:

Her 'terminal illness' doesn't mean that she will die from it. It isn't like stage 4 brain cancer. I didn't mean to imply that she had a character flaw.

Actually, that's exactly what it means (from wikipedia, for what it's worth): "Terminal illness is a medical term popularized in the 20th century to describe a disease that cannot be cured or adequately treated and that is reasonably expected to result in the death of the patient within a relatively short period of time. "

Maybe she's not going to die tomorrow, but unless there's more to the story, you sound incredibly callous by talking about this woman like she got a terminal illness on purpose to scam the government out of a few thousand dollars before she dies.