Social Security Disability Income (SSDI)
Monthly federal benefits for insured workers totally disabled for at least 5 months, based on work credits, coordinated with any group or individual disability coverage.
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Practice This Concept
A disability income policy is written with Social Security integration. If the insured becomes totally disabled and is approved for Social Security disability benefits, the private insurer will:
Reduce its benefit so that combined private and Social Security payments do not exceed the policy's target replacement amount — Integration coordinates private disability benefits with benefits from other income sources, most commonly Social Security Disability Income and workers' compensation, so that the insured's combined income does not exceed a targeted replacement level. When the insured is approved for SSDI, the private insurer reduces its monthly benefit by all or part of the Social Security payment, subject to a minimum-benefit floor stated in the policy. Integration prevents overinsurance, where an insured would receive more while disabled than from working, which would weaken the incentive to return to work.
National insurance concept
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