Disability insurance, or DI, provides income support for persons unable to work due to either physical or mental disability. Mental illnesses that might qualify someone for DI include schizophrenia, obsessive-compulsive disorder, manic depression, post-traumatic stress disorder (PTSD) and other disabling brain disorders.
There are two sources of long-term DI. Private DI is often available through a person's employer but can be purchased individually. The Social Security Administration, or SSA, provides public DI.
Background
For either a physical or mental illness to meet the definition of disability under either private or public DI, it must be severe and prolonged and materially interfere with your ability to work. If the eligibility criteria of your DI are met, DI will replace a portion of your lost income. Both private and public DI specify waiting periods, pre-existing conditions, exclusions and the amount and duration of the benefit.
Mental Illness and Disability
Defining disability is key in private and public DI. According to the National Alliance on Mental Illness, mental illnesses such as schizophrenia, obsessive-compulsive disorder, manic depression, PTSD or another disabling brain disorder may entitle you to benefits. However, without a detailed evaluation of the severity of impairment, whether it was a pre-existing condition or an excluded diagnosis and whether or not you can do your job, it is impossible to say whether you would be covered.
Private Disability Insurance
All private DI policies define disability, but definitions vary by company or type of policy. For mental illness coverage, it is important to examine policies for exclusions, such as bipolar disorder, and any coverage limits on pre-existing conditions.
Private DI policies vary but the broadest coverage is based on an inability to perform the material and substantial duties of your regular occupation. These policies cover the ability to do your specific job and will pay even if you are able to work in another type of job.
Less expensive DI may cover circumstances where you are unable to have any gainful employment. If you were unable to continue as a surgeon but could work as a gardener, it would not pay benefits.
Public Disability Insurance
Public DI is administered through the SSA. There are two types based on your connection to the workforce.
Social Security disability insurance, or SSDI, is available for persons age 31 or older who have paid into the Social Security Trust Fund for 20 of the last 40 quarters. SSDI requires a five-month unpaid waiting period before benefits can begin.
Supplemental security income, or SSI, is for persons who are disabled, very poor and unable to work. SSI eligibility requires medical and asset determinations.
For both, SSA defines disability in terms of ability to work at any job. In that respect, it is more restrictive than most private DI. According to the SSA, a disability is a physical or emotional impairment severe enough to keep a person from doing work for a continuous period of not less than 12 months or which can be expected to result in death.
Private and Public Disability Insurance
Private DI generally covers up to a 24-month lifetime benefit. Some people may be eligible for both private DI and SSDI and will often be required to apply for both. In such cases, once SSDI benefits start, private DI payments will stop or be offset by the amount of SSDI benefits.
References
- U.S. Social Security Administration: Overview of Our Disability Programs
- National Alliance on Mental Illness: Social Security Benefits
- Disability Rights Legal Center: Disability Insurance
- UCSF Medical Center: Health Coverage and Disability Benefits
- ConsumerReports.org: Do you need disability insurance?
