What is Disability Insurance?

by | Nov 6, 2008

It is found through many surveys that masses either not have or a little knowledge about short term disability (STD) or Long term Disability plan coverage.  As STD and LTD plans are one of those benefits that are very essential for a company to provide to its employees and you should be well wary of those benefits. So you should have a good knowledge of Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI).
Social Security Disability Insurance can be provided to you in case you have availed 40 quarters of Social Security Contributions and suffering from a disability. The Social Security Disability Benefits or SSDI are given to the persons who in recent times should have working experience of 5 years from total 10 years. It has special provision for the people working below the age of 31 years as they may have not much working experience.  According to federal Social Security Disability Act, “disability” means the “       “inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to last for a continuous period of not less than 12 months or result in death.”
Supplemental Security Income (SSI) is different from Social Security Disability Insurance in essence that it is funded by the general revenues of the Federal Treasury and is put forth with the objectivity of providing at least minimum level of income to persons who are aged, disabled, or blind and requires economic need. To qualify for SSI a person’s current resource limit for an individual is $2000 and $3000 for a couple.
Now comes for the STD, which is an insurance that is provided by an employer. This is insurance that is paid out in a certain amount of money for a short period of time in case of qualifying time for   sick leave, vacation time, paid time off and some other type of qualifying time.  The amount for STD ranges as equal to state’s unemployment payment, to a maximum of about 66% of base pay. LTD or long term disability insurance payment is provided when an employee goes into physical or mental illness that prevents an employee from performing the job for a longer period of time covering the point from commencement of illness. As STD there is also a qualifying period for LTD also. It happens to be of minimum of six months in case of LTD.

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