SSDI vs. Long-Term Disability Insurance

If you have long-term disability (LTD) insurance through your employer or a private policy, you may be eligible for both LTD and SSDI. They work together, but there are important differences.

The Offset Rule

Most LTD policies require you to apply for SSDI and include an offset provision. If you're approved for SSDI, your LTD benefit is reduced by the SSDI amount.

Why You Should Apply for Both

• LTD is faster. Most LTD claims are decided in weeks, not years. You get income while waiting for SSDI.
• LTD requires SSDI application. Most policies require you to pursue SSDI. If you don't, they can cut off your LTD benefits.
• SSDI provides Medicare. After 24 months on SSDI, you get Medicare — something LTD doesn't provide.
• SSDI lasts longer. LTD policies often max out at 2-5 years or age 65. SSDI continues until full retirement age.
• SSDI back pay. When your SSDI is approved, you'll receive back pay — and your LTD carrier may want reimbursement for the months they paid you the full amount.

Important: LTD Reimbursement

If your LTD policy paid you while your SSDI claim was pending, the LTD insurer may be entitled to reimbursement from your SSDI back pay. This is called a "lien" or "overpayment." Your attorney can often negotiate this amount down.