You can apply for Social Security disability insurance benefits and long-term disability (LTD) insurance benefits at the same time. However, your LTD company will "offset" the Social Security disability payments. That means it will find out how much Social Security is paying you and will subtract that amount from your LTD payment. This is perfectly legal because it is written into your contract. In fact, your LTD company will usually require you to file a Social Security disability claim for this reason -- it saves money. (This requirement is also in your policy.)
Is this fair? After all, a long-term disability policy is something you or your employer pay for. We'll let you decide.
The good news is that long-term disability payments are generally higher than Social Security disability payments, so it's still worthwhile to have long-term disability insurance, especially in the case where Social Security denies your claim but the LTD insurance company pays your claim. While the average Social Security disability payment is around $1,200 per month for someone with average wages, long-term disability payments are generally 50-80% of your regular salary.
Another benefit of LTD insurance is that you can be disabled for less than a year; to qualify for Social Security disability, you need to be disabled for more than 12 months. And while Social Security will deny you if you can work another type of job, some long-term disability policies pay you even if you are working another job, as long as you can't do your regular and customary work.
Additional Questions and Answers
- Are claims for long-term disability benefits unfairly or disproportionately denied?
- How can having a long-term disability attorney help you win your LTD case?
- On an LTD medical recertification, what if the doctor indicates you are able to return to some form of work?
- How much does it cost to hire a long-term disability attorney or LTD lawyer ?
- What is the elimination period on a long-term disability benefit claim ?