A Look At The Differences Between Private Disability Insurance And SSDI
When you get injured and you are no longer able to work, it is a scary place to be. Not only will you be facing the loss of your income, you could be facing the loss of health insurance and a huge change in how you live your life. In these situations, there are basically two different forms of insurance that may be an option: private disability insurance through your employer or Social Security Disability Insurance (SSDI). Both of these forms of insurance can be a saving grace when you cannot work, but they are also completely different things. Here is a look at the primary differences between private disability insurance and SSDI.
Private disability insurance will usually kick in much faster than SSDI.
Because private disability insurance is offered more as a service that you or your employer has paid for on your behalf, it will typically pick up and start providing coverage and benefits right away. With SSDI, you will have to go through the process of being declared disabled legally, which can take some time. In some cases, employees will obtain private disability coverage first, and that will carry them over until they are legally declared disabled and can qualify for SSDI.
SSDI provides more extensive coverage in most cases.
While employer-provided disability insurance has its perks, it is not as extensive as SSDI most of the time; there are limitations with coverage. For example, private insurance will likely only cover a portion of your lost wages during your disability, may only last a certain length of time, and may not provide you with the best health insurance options. On the other hand, SSDI will give you long-term coverage, and you will probably become eligible for health insurance through Medicaid or Medicare.
Private disability insurance is something that has been paid for, whereas SSDI is not.
If you have private disability insurance, there is a high likelihood that this is a benefit you have paid for through the employer you have. In rarer cases, people pay for private disability insurance coverage on their own through an unaffiliated provider. SSDI is not something affiliated with an employer, but rather, the Social Security Administration. Therefore, it is not a benefit you have necessarily paid for, but you have had deductions for Social Security taken out of your paychecks to cover what you would draw as income if you do become disabled.
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