Disability is something we hear about happening to other people, but don’t think will happen to ourselves, until the day it does. The risks of becoming disabled before retirement are 3-in-10 for the average 20-year-old worker, according so some studies.
As we build our families and develop our careers we balance risk and do our best to build a strong foundation to provide for our families in the worst case scenario. Disability is something none of us want to expect but, the odds are great we may in fact need to plan for the possibility. Disability Insurance is one way to cover this type of risk and so is our current Social Security program.
In order to qualify for benefits, a person must have been employed in jobs covered by Social Security or made Social Security Contributions for self employment. A person must have worked long enough, and recently enough, to earn qualified work credits. Social Security work credits are based on a person’s total annual income. A person can earn as many as four credits a year.
According to the Social Security Website:
“The amount needed for a credit changes from year to year. In 2006, for example, you earn one credit for each $970 of wages or self-employment income. When you’ve earned $3,880, you’ve earned your four credits for the year.
The number of work credits you need to qualify for disability benefits depends on your age when you become disabled. Generally, you need 40 credits, 20 of which were earned in the last 10 years ending with the year you become disabled. However, younger workers may qualify with fewer credits”
If you have been making Social Security wages or claim them from self employment income you should receive an annual Social Security Statement which will show whether you have earned the work credits required to qualify at the time the statement was prepared.
In order to qualify for Social Security Disability benefit’s a person must have a medical condition that meets Social Security’s definition of disability. Benefits include monthly cash payments for those unable to work a year or longer due to the disability. Benefits typically continue until a person is able to return to work. There are several “work incentives,” that may provide continued benefits and health care coverage to help a person return to work.
For more information about Social Security Disability Benefits visit http://www.ssa.gov/disability/.
Glossary of Insurance Terms:
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