Disability Insurance: Social Insurance Substitute
(Do you need one? And how can you get one?)
Written by
As a writer and research for over two decades, Tom Senkus shares his expertise on such topics as financial planning, insurance, telecommunications, and more. His work has been featured in over 150 publications.
A lot of people rely on the income they receive from their Social Security benefits. But are those benefits enough and what options do you have? Disability insurance and riders such as social insurance substitute can reduce premiums and may even be the best of both worlds.
An independent insurance agent is a local must-have when it comes to your financial planning and protection. They have all the info you need when it comes to disability insurance, Social Security benefits, and how to save you the most money when planning for the future. That's because an agent listens to your needs, your goals, and your current situation to help develop and grow the right set of policies for you.
What Is Disability Insurance?
Disability Insurance, aka DI, is a type of insurance that provides financial protection in the form of replacement of your income when you become disabled and unable to work. There are different types of disability insurance such as long term, short term, individual, and group plans. It's best to discuss with your independent insurance agent on which disability insurance policy is right for you.
What Is a Social Insurance Substitute?
A social insurance substitute, also known as SIS, is an endorsement or rider that can be added to your disability insurance policy to help reduce the premium. It works like this:
You have a disability benefit of $4,000 per month to supplement your income should you become disabled and unable to work. Your monthly premium is $133. You decide with your independent insurance agent to add an SIS rider. With the SIS rider, you still get the same $4,000 monthly benefit, and even better you will now pay $123 per month. How is this, you ask. Well, with the SIS rider the insurance company gives you a discount because you have minimized their amount of risk. With the SIS rider you will be required to apply for supplemental coverage through the Social Security Administration if you become disabled and cannot perform your regular work duties. Once applied and found eligible for legislative benefits, then your DI policy will kick in and make up the difference.
So, if you qualify for say $1,500 per month from the Social Security Administration, then your DI policy will pay out the remaining $2,500 monthly so you get the total $4,000 monthly allotted benefit.
Your independent insurance agent can dive into the details with a fine-tooth comb and make sure everything's crystal clear. Until then, knowing how to apply for Social Security disability insurance benefits is necessary should you choose a SIS rider on your DI policy.
How To Qualify for Social Security Disability Benefits
There are a few simple, but important, qualifications in order to begin receiving Social Security disability benefits. It’s good to know all your options first to help build a plan with your independent insurance agent for the right coverage when the time comes.
Qualifications for Social Security disability benefits:
- You must have worked in jobs that are covered by Social Security.
- You must have a medical condition that meets Social Security's definition of disability.
- Social Security pays only for total disability.
How To Apply for Social Security Disability Benefits
If you want to take advantage of Social Security disability benefits, here are some steps to get it set up :
- First, complete your application online
Items you'll need to apply online:
- Your Social Security number and proof of age
- Names, addresses, and phone numbers of all physicians, therapists, and caseworkers who have taken care of you
- Names and dosages of all the medications you are taking
- Medical records from your physicians, therapists, and caseworkers that you have in your possession
- Laboratory results for any tests
- A summary of where you worked and work performed
- Recent W-2 form or federal tax return
Save on Disability Income Insurance
Our independent agents shop around to find you the best coverage.
What Are My Other Social Security Disability Options?
This is a bit of a loaded question, and one that should be answered by a licensed professional like your independent insurance agent. But just so you get the gist, there are other options available out there for you if you don’t qualify for Social Security disability benefits, or just need to have more coverage in place. Individual and group disability options can help replace between 40% and 70% of your income, which is a huge benefit when you're unable to work and earn money.
An independent insurance agent can help answer your questions, and set you up with:
- Individual long-term disability insurance: This coverage handles long-term injuries, disabilities, and illnesses. These disabilities or illnesses keep you from working and are not to be confused with work-related injuries or illnesses. Coverage lasts years and sometimes decades, depending on your benefits.
- Individual short-term disability insurance: Just like long-term disability insurance, short-term also covers injuries, disabilities, and illnesses that keep you from working. Instead of lasting years, this coverage only lasts for days or months, hence the title short-term.
And if you're employed, you may also have group short-term or long-term disability insurance options if your employer offers it.
- Group long-term disability insurance: Group long-term is offered through your employer. You can choose to participate in group coverage or opt out. This policy is offered to all eligible employees at your work and is the kind of disability coverage that lasts for years. Health risk factors are not accounted for since it is rated on a group basis, which is a huge plus.
- Group short-term disability insurance: This group disability coverage is just like group long-term insurance in the sense that it is offered through your employer and covers disabilities, illnesses, and injuries. Again, it is offered to all eligible employees and you may choose to opt out if you so desire. Health risk factors are still not accounted for on this disability policy type and your employer normally pays for this coverage.
Remember, Social Security disability benefits only cover you until age 65 and are only an option if your physician deems you totally disabled and unable to work. That eliminates any short-term disability options including injuries, illnesses, pregnancy or birth-related leave.
Life’s too short to take a chance on hoping you won’t need disability insurance. It’s much better to be prepared, just in case, with the coverage you need. And that's where an independent insurance agent can help.
Save on Disability Income Insurance
Our independent agents shop around to find you the best coverage.
How Can an Independent Insurance Agent Help?
The good news is that you’ve got options when it comes to your disability insurance, from individual and group plans to social insurance substitute riders and beyond. And an independent insurance agent knows all the ins and outs of each and can help you find the perfect coverage or package of coverages to insure you from what could be a devastating circumstance.
An independent insurance agent works with numerous insurance carriers and has solutions for all your disability insurance planning. There are a lot of combinations that could unlock this code and your independent insurance agent wants to make sure you have the right one. Pretty sweet, huh?
Benefits for People With Disabilities. (2019). https://www.ssa.gov/disability/