Last week a friend of my wife’s called me to see if I had any advice for Social Security Disability. I know she was actually looking for me to tell her that it was not too late to get Disability Income insurance from a private insurance company.
This person had just been diagnosed with Stage 4 colon cancer. Once a diagnosis of cancer has been made, no medically underwritten, private insurance company will approve a Disability Income application. If she wants Disability Income insurance, her only hope is with Social Security.
Unfortunately, the Social Security Administration is severely backed up. It can take months, even years, for Social Security Disability Insurance Benefits to show up in your checking account.
If your claim for Social Security Disability insurance is clean and your condition falls neatly into Social Security’s definition of disability your claim could be processed quickly. In a matter of weeks you could start to see regular deposits from Social Security into your checking account. Social Security defines disability as follow. All 3 elements must be apparent in order to have a clean application.
- You cannot do work that you did before;
- We decide that you cannot adjust to other work because of your medical condition(s); and
- Your disability has lasted or is expected to last for at least one year or to result in death.
After you file your initial claim paperwork and every piece of required data has been collected, your file will be sent to your state’s disability processing agency; often called a DDS. If they find that you medically qualify for Social Security Disability payments, you will start seeing them very soon.
If, however, the DDS is unable to fit you neatly into their definition of disability, they have the right to demand a hearing to gather more information. They do this roughly 60% of the time. You may be in for a long wait. There are 143 offices for hearing Social Security Disability claims.
Those offices go by the acronym ODAR. The most recent records I was able to find indicate that when a DDS requests an ODAR hearing it will add a delay of 272 – 622 days to a person’s claim. That is in addition to the time it took for the initial processing of the claim by the DDS.
If the result of the ODAR hearing is favorable to you, you can expect a retroactive payment. That payment will be for that month’s disability insurance payment plus all the months that you have been disabled less 6 months.
According to the Social Security Disability website, these delays are not a hardship for working families because,
“Social Security program rules assume that working families have access to other resources to provide support during periods of short-term disabilities, including workers’ compensation, insurance, savings and investments.”
If you already have a Disability Income insurance policy through a private insurance company or you have been able to save enough money to last you during the Social Security decision process, you have already mitigated most of the potential problem.
If, on the other hand, you have neither a Disability Income insurance policy nor sizable saving, the solution is simple. Plan Now.
The Social Security Administration will not pay anything until their claims process has run its full course. While the government is deciding whether or not you are actually disabled, even though you cannot work to earn an income, your bills continue.
It could take Social Security 2 years to decide to start paying you. When they do, they will reimburse you for all the back payments they should have given you. Unfortunately, mortgage companies will not wait 2 years for payment, neither will car finance companies nor other bills.
You options will be few. Either you will have to use what money you have to pay them or have your home, auto, etc. repossessed while you wait for an ODAR. If there is another option, I am not aware of it.
If you are only concerned about a disability associated with a critical illness, contact The Insurance Barn to see what your options would be for a Critical Illness only policy. Critical Illness insurance has been around for years in Canada and Europe. They are very popular plans. They pay a lump sum of cash in the event the insured is diagnosed with one of the critical illnesses.
If you are concerned about disability caused by either an accident or illness, you would probably be interested in a traditional Disability Income insurance plan. Contact The Insurance Barn and we will send you more information about Disability Income insurance.
The bottom line is that I want to avoid having to tell people that there is nothing that I can do to help them if they become disabled. The only way to be assured I am not called by one of my clients in a panic over money on top of the stress of a bad diagnosis is if they have taken steps to protect themselves while they were still healthy.
If only my wife’s friend had gotten a Critical Illness of Disability Income policy before her cancer diagnosis, our conversation last week would not have been necessary. I would not have been put in a position where I was unable to solve her problem.