Public & private disability insurance options

If you are undergoing cancer treatment or have complications from surgery, you may find that you are no longer able to work and earn a living as you did previously. Disability insurance may provide you with some income if you are unable to work due to a medical condition. Disability insurance benefits are offered by the federal government, some state governments or through a private insurance company.

In this section we cover:

• Federal Disability Insurance
• State Disability Insurance
• Private Disability Insurance
   

Federal Disability Insurance

• Social Security Disability Insurance (SSDI) is a U.S. federal loss of income protection program. SSDI defines a “disability” as a condition that is expected to last at least one year or will result in death. If awarded SSDI, payments begin 6 months from the date of the determined disability.
• Supplemental Security Income (SSI) is a U.S. federal income supplement program designed to help disabled people with little or no income. Eligibility is decided case by case. If you are eligible for SSI, other benefits (e.g. food stamps) may be available.
• SSA Compassionate Allowance speeds up the SSDI claim process. Certain disabling conditions, including metastatic breast cancer, receive a decision within three weeks. Funds are distributed in the same manner as regular SSDI (6 months from date of the disability onset).

State Disability Insurance

Some states offer temporary disability insurance. These programs help offset lost wages for workers who are very ill or injured off the job, and unable to work. Each state differs on the size of the benefit (it is a portion of your salary, typically two-thirds) and how long you will receive benefits (a maximum of 6-12 months). Generally, it is easier to qualify for state disability than it is for Social Security disability.

Private Disability Insurance

The two main types of private disability insurance are short-term and long-term coverage. Both replace a portion of your monthly base salary up to a cap during disability leave. Some long-term policies pay for additional services, such as job training to return to the workforce.

• Group coverage is typically offered through an employer or through some other kind of group such as a professional association. This type of coverage is usually a benefit of employment and is not portable or transferrable if you leave the job for any reason. Five states—California, Hawaii, New Jersey, New York, and Rhode Island—and Puerto Rico sponsor disability income plans that require employers to participate.
• Individual disability coverage may be bought; eligibility and cost are tied to your health history and other factors. Typically, the insurer will want to review 3-5 years of medical history and may require some kind of medical exam before issuing a policy. Some pre-existing conditions may disqualify you from coverage if you’re still suffering from the condition when you apply for disability insurance. Cancer is one of these conditions, but disability insurance companies may still offer you coverage if you’ve been in remission for 3-5 years (the timeframe varies between insurance companies). 
  • Short-term disability (STD) insurance is an insurance policy that protects you from loss of income if you are temporarily unable to work due to an illness, surgery, injury or accident. Many employers require that an employee use all of their sick days before being eligible for short-term disability benefits. STD packages vary but they typically provide 50-70% of your salary.
  • Long-term disability (LTD) insurance kicks in when short-term disability insurance benefits end. When short-term disability insurance benefits expire (generally after 3-6 months), the long-term disability insurance pays a percentage of your salary, typically 50-70%. Each LTD insurance policy has different conditions for payout, diseases or pre-existing conditions that may be excluded.