If you are unable to work due to a disability, you may be wondering whether you should pursue a Long Term Disability (LTD) claim or a Social Security Disability (SSD) claim. To help make an informed decision, you need to start off by understanding how the two programs work.
SSD and LTD programs achieve the same goal – providing financial assistance to individuals who can no longer work due to disabling conditions. However, it is important to understand that these programs are vastly different.
SSD is a government-backed program while LTD is not
If you work and earn an income in the United States, you will most certainly pay into the Social Security system. These deductions are made from your paycheck on a monthly basis. If you become disabled after accumulating enough work credits, you may apply for these benefits. However, you have to meet the Social Security Administration (SSA) standards for disability to be eligible for the SSD benefits.
Long-term disability insurance, on the other hand, is an employer-funded health insurance plan that is regulated by the Employee Retirement Income Security Act (ERISA). To qualify for long-term disability claims, you must sign up for a long-term disability insurance plan, have a medical condition that fits the insurance policy’s definition of a disability and file a claim with your insurance carrier.
Thus, while SSD is paid by the SSA, LTD is paid by the insurance company.
Can you claim both SSD and LTD benefits?
Well, this is the tricky part. Some long-term disability policies may also require you to pursue SSD claims within a certain timeframe. If this is approved, the LTD carrier may shift their disability payment burden to the SSA. However, the criteria for LTD claims is quite different than that used by SSA.
Understanding how SSD and LTD claims work can help you pursue the right benefits when you are no longer able to work due to a disability.