The Social Security Administration reports that just over 1 in 4 20 year-olds will become disabled before they retire and, that over 37 million Americans – 12% of our population – are classified as disabled. Half of those are working age.
We insure our homes. Our cars. Even our cell phones. A good many of us however think the Social Security Disability Income (SSDI) program will cover lost income.
The definition of disability under SSDI is the inability to engage in ANY substantial gainful activity due to disability, which must be expected to last at least 12 months and/or result in death.
The ‘triggers’ for collecting benefits under most employer sponsored group disability and privately owned plans are far more liberal; e.g., inability to perform one or more material duties of your occupation that results in a minimum loss of 20% of income.
The cost of group LTD is about ½ of 1% of pay (50 cents/$100 of covered salary); individual DI is closer to 2% pay.
So what will it be; SSDI or privately owned disability insurance? The latter is affordable and far more likely to provide benefits when badly needed.