Why is an ERISA long-term disability policy worth more to you than social security disability?
So why is it that an ERISA long-term disability plan will give you more money in the long run than social security disability will? Well, the answer is simple. Each long-term disability insurance contract has different terms and different pay rates. From experience, some policies will pay you only 60% of your pre-injury wage. In other cases, some policies will pay up to 80% of your pre-injury wage. Most will fall somewhere in the middle between those two, but the higher the percentage, the more valuable it is to you and the better policy it is for you.
But if you compare that to what most people get on social security disability, most people are only getting probably between a thousand and $2,000 per month on social security disability. But if you made $6,000 a month at your employer before you became disabled, then your disability benefit could be up to $4,000 a month. That’s a huge benefit for you to be able to get in addition to any other benefits that you might be able to get.
Now, most of those policies will require that you apply for social security disability and whatever you from social security disability will offset what the long-term disability insurance carrier has to pay, so you will combine both of those sources of revenue. And maybe you get $1,300 a month from social security and your total benefit is up to $4,000 a month, so now you’re only actually getting $2,700 a month through your long-term disability benefit. Either way, you’re still getting a lot more money than you would get from just having social security disability.
It’s a wonderful employee benefit that a lot of employers offer to their employees. If you have a long-term disability insurance policy, you need to make sure that you know that and that you follow the rules so that you don’t lose out on that extra money every single month.
If you have any questions about this on whether you have a long-term disability plan or whether it’s covered by ERISA, shoot us an email, send us a message on Facebook or Instagram. We’d be happy to look into your case and help you figure out what you have available to you and what is not available to you. Thanks.