Social Security Disability Insurance (SSDI) can pay benefits to the family members of someone who is disabled and unable to work. Spouses, children and even ex-spouses of someone receiving SSDI benefits may qualify for their own monthly payments. Each qualifying family member could get up to 50% of the amount the disabled beneficiary is getting. However, the total of payments made to the whole family can’t usually be more than 150% of the disabled person’s benefit. Consider working with a financial advisor as you develop or modify an estate plan.
SSDI Basics
SSDI is for people who have worked and paid Social Security taxes on the wages they earned but have become disabled or deceased before reaching age 62, when they can begin receiving regular Social Security benefits. The size of the monthly benefit they are eligible for varies depending on their work and earning history.
The amount of the SSDI benefit also goes up occasionally to make up for inflation. In June of 2022, the average monthly benefit was $1,361.68, according to the Social Security Administration.
SSDI is only for workers who are disabled, which is defined as a condition that will last at least 12 months or will end in the person’s death. The condition must also keep the person from working. Numerous medical conditions can qualify, but the government is generally strict about granting eligibility for disability payments.
Supplemental Security Income (SSI) is another federal program that can provide monthly payments to disabled people. Unlike SSDI, a disabled person does not need an earnings record to receive SSI benefits. And both children and adults can receive SSI payments. However, SSI recipients must have low incomes and few assets. Also, SSI benefits for 2022 are capped at $841 per month for an individual and no more than $1,261 if that person also has an eligible spouse.
Family Members Who Qualify
Once a person has qualified to receive SSDI payments, his or her family members may also be able to get benefits. Possibly eligible family members include:
A spouse, if aged 62 or older
A spouse of any age who is taking care of one of the children who is disabled or under age 16
One of your children who is younger than 18, or younger than 19 and attending high school, including adopted children and sometimes stepchildren and grandchildren
An unmarried child 18 or older who has a qualifying disability that began before age 22
Your ex-spouse may also be able to get payments if you are receiving SSDI benefits. Any SSDI payments to a former spouse won’t have any effect on your SSDI benefits. And not all ex-spouses can get them. The divorced spouse must:
Family Benefit Maximums and Rules
Each member of the family of someone getting SSDI benefits can qualify for a separate monthly payment equal to as much as 50% of the disabled person’s benefit amount. So assuming a disabled person is receiving the 2021 average amount of $1,282.37, that person’s child under 18 could receive $641.18 each month.
That can change, however, if a disabled person has more than one family member who qualifies to receive SSDI. That’s because the Social Security Administration has a cap on the total SSDI benefits a family can receive. This cap is generally 150% of the disabled person’s monthly SSDI benefit. However, it can go as high as 180% in some circumstances.
If a family’s total SSDI benefits exceed the maximum percentage, then Social Security will reduce each person’s payment to keep the total below the cap. The reductions are applied proportionately to each individual’s benefit to get below the cap, except that the disabled parent’s benefit is not reduced. This will reduce each family member’s benefit below 50% of the disabled parent’s benefit.
Benefit Qualifications for Specific Family Members
Now that we understand how much each family member might be entitled to, let’s dive into how the benefits work for each type of family member who might be eligible.
Benefits for Surviving Spouses
Survivor benefits are available to widowed spouses, up to 99.6% of their deceased spouse’s benefit. The surviving spouse must have reached the retirement age of 60, or 50 if they themselves are disabled. The individual can even apply for their deceased spouse’s benefit at 60 and then apply for their own individual benefit at age 62 if they think that their work might benefit them with a larger amount.
Benefits for Divorced Spouses
If you were married to your spouse for a minimum of 10 years then you’ll be eligible to receive up to 50% of your deceased spouse’s benefit. A divorced spouse can even start receiving the benefit before their formal spouse starts taking the benefit for themselves. To receive the benefit, you’ll need to be 62 years old or older. If you have not yet reached your normal retirement age then the divorce must be finalized for two or more years.
Benefits for Children and Grandchildren
Children can qualify as the survivor of a deceased worker or as a dependant of a living parent who receives disability benefits. To qualify the child must be under the age of 18, unmarried or disabled. The benefit is up to 50% of the parent’s benefit if the parent is living, or up to 75% if the parent is deceased. Grandchildren can receive the same benefits if they become a dependent of their grandparent but great-grandchildren can’t qualify for this benefit.
Benefits for Disabled Children
A disabled child can qualify for their own SSDI benefits even though they have no earnings record. The same goes for an adult child who becomes disabled before the age of 22. The process can be difficult, however, to qualify. Once approved, the disabled child can receive up to 50% of their parent’s benefit.
Benefits for Dependant Parents
Some parents are dependant upon a child either physically, financially or both. The dependent parents of a deceased worker who is 62 years of age or older can receive up to 82.5% of the worker’s benefit. If both parents fall into this category then the maximum drops to 75%.
Bottom Line
SSDI can not only provide monthly financial assistance to workers who become disabled, but it can also pay benefits to their family members, especially if they become eligible because of a death on the job. Spouses and children are eligible to receive up to 50% of the monthly payment to disable parents, which averages $1,282.37 in 2021. The amount each family member can receive may be reduced, however, if the total benefit paid to the family comes to more than 150% of the disabled parent’s benefit amount. Generally, you are not taxed on SSDI benefits.
Tips on Estate Planning
A financial advisor who specializes in Social Security Disability Insurance can help when applying for benefits. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
If you’re planning for the future then it’s a good time to think through how you can maximize your social security benefits.
Dealing with social security benefits can be complicated. Check out these ten other secrets you should know about social security.
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The Social Security Administration provides disability payments to more than 8 million Americans, primarily through Social Security Disability Insurance, or SSDI. Applicants must be diagnosed with an injury or condition that prevents them from working for at least a year or is expected to result in their death.
Another form of disability benefit is Supplemental Security Income, or SSI, which is funded by the Treasury Department but administered through the SSA. It aids individuals whose financial resources are below specified limits.
Being approved for either program requires substantial evidence and the process can take a considerable amount of time, usually involving an in-person or phone interview.
Here's what you need to know to apply for Social Security disability benefits, including what is available and what conditions qualify.
For more on Social Security, find out when SSDI checks go out, how to access your benefits online and how retirement benefits are calculated.
You should apply for disability benefits as soon as you become disabled. You can apply online, by calling 800-772-1213 or in person at your local Social Security office.
Whichever route you go, you'll want to have the extensive documentation required at the ready -- including detailed information about your condition and exact employment history.
To qualify for disability you cannot already be receiving Social Security benefits and must not have been denied disability benefits in the past 60 days.
When you apply, be patient: A majority of disability claims are denied at first and the appeals process can take months -- or even years -- to resolve. (Only 193,000 of more than 500,000 applicants' claims were accepted in the first quarter of 2019, according to Social Security Administration.)
Even getting a preliminary decision on your application takes more than five months on average, according to AARP.
There is no set list of approved disabilities, but the Social Security Blue Book, also known as Disability Evaluation Under Social Security, is an online directory of physical and mental health conditions that automatically qualify if you meet the stringent requirements for diagnosis.
For adults, they are broadly split into 14 categories.
The same 14 categories are used for children under 18, with the addition of low birth weight and failure to thrive. Rather than looking at whether a condition inhibits their ability to work, the criteria for minors is whether it will cause severe functional limitations for at least a year or is likely to be fatal.
You can still qualify for SSDI or SSI even if your condition is not in the Blue Book but you will have to make a strong case that it limits your daily functioning.
If your disability means you can't do the work you did previously, the Social Security Administration will want to know if there is other work you can do, considering your circumstances and skills.
Certain family members of workers with disabilities can also receive benefits. And adults who have been disabled since childhood may qualify for SSDI, based on parental employment records.
Both SSDI and SSI pay benefits to people that the Social Security Administration determines have physical or mental disabilities severe enough to prevent them from engaging in "substantial gainful activity" for at least a year or that are expected to end in their death.
The Social Security Administration generally uses the same medical criteria to determine if a disability entitles an adult to SSDI or SSI and collecting both benefits is allowed.
SSDI is an earned benefit. As with retirement benefits, it comes from paying Social Security taxes during the course of your employment. In 2022, the estimated average monthly SSDI benefit was $1,358.
There's a five-month waiting period for SSDI benefits, so payments will not begin before the sixth full month of disability. You'll be eligible for Medicare coverage after you've received disability benefits for two years.
SSI, meanwhile, is aimed at disabled Americans with very limited income or assets. It doesn't come from previous earnings. In fact, you can receive SSI benefits if you've never worked or paid Social Security tax.
But your income and assets must not go above very strict caps: In 2022, the maximum federal SSI payment was $841 a month for an individual and $1,261 for couples receiving SSI jointly. Income above those amounts can make you ineligible to receive benefits.
Other benefits, including workers compensation and pension payments, can also impact how much you receive.
You can start the process of applying for SSDI here and SSI here.
The Federal Social Security Administration has two popular programs for people with disabilities. One is Social Security Disability, also known as SSD. The other is Supplemental Security Income also known as SSI.
The SSI program has low income and resource requirements. Other liquid income can reduce or even eliminate an SSI cash benefit. Also, if you have liquid resources worth more than $2,000 for an individual or $3,000 for a couple, you may not be eligible for SSI. Some of your resources (the house you live in, some household items, the car you drive, and some others) may not be counted.
However, sometimes Social Security uses complex rules to add other family members' income and resources to your record. Likewise, if someone helps you with food or housing expenses, this may be counted as part of your income. These rules can be confusing and if they apply to your situation, you may want to apply for help. Before you apply for SSI disability benefits, you may want to talk to an attorney or disability expert because participation in the SSI program is means-tested, which means that certain income and assets can potentially disqualify you from receiving benefits.
The SSI program uses a fixed federal rate of assistance, which is supplemented by the state to determine the maximum rate that SSI will provide. The levels of benefits SSI provides may differ from state to state. Also, the maximum SSI benefits provided may change depending on the different categories. These SSI amounts and categories for New Jerseyans in 2015 are listed in Supplemental Security Income (SSI) in New Jersey (from the Social Security website). For example, the maximum amount for a single person is $764.25 per month for combined federal and state benefits.
The maximum for a couple where one of them is entitled to SSI is $886.00. per month. The maximum for a couple where both are entitled to SSI is $1,125.36 per month. These amounts may decrease because of other income or depending on your living arrangements.
That depends on the age at which you become disabled. Those under age 24 can qualify for Social Security Disability Insurance (SSDI) with as little as a year and a half of work, but that threshold increases with age.
As with retirement benefits, SSDI eligibility is measured in Social Security credits. Those credits are earned by paying Social Security taxes on earned income. In 2022, you get one credit for every $1,510 you earn in "covered" employment (or self-employment), up to a maximum of four credits per year (with earnings of $6,040 or more). The amount of the credit is automatically adjusted each year based on national wage trends.
For retirement benefits, the equation is simple: the worker is entitled to benefits starting at 40 credits, i.e., after spending 10 years working and paying Social Security taxes. Although the 10 years need not be consecutive, most workers reach that base long before they reach age 62, the minimum age to collect retirement.
But disability (defined as an illness severe enough to prevent work activity for at least one year or that may result in death) can occur at any age. For that reason, Social Security has adopted a sliding scale for SSDI. To be "insured" (this is how Social Security refers to people who meet the work requirements for benefits), two requirements related to age and employment must be met.
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About 61 million American adults have a disability, according to the U.S. Census Bureau. For those Americans who have a disability, qualifying for life insurance often poses a challenge. Because insurers view applicants with disabilities as a greater risk, it can be harder to find suitable coverage options.
But there are coverage options within reach. So if you have a disability, here’s how to qualify for life insurance—and some alternative options if you find you can’t qualify.
Even if you have a disability, you can still qualify for life insurance as long as your disability doesn’t impact your life expectancy. And the nature of your disability will affect the available policy choices.
“If you are disabled due to a physical impairment like blindness or deafness, you may be able to qualify for a traditional term policy, especially if your significant other has life insurance. In this situation, most life insurance providers will allow you to purchase a policy that offers at least half of the coverage your spouse has for you,” says Cliff Pendell, vice president of marketing and operations at JRC Insurance Group.
If your disability affects your life expectancy, it can impact a life insurance policy in these ways:
If your disability is severe enough, or if you have other compounding health problems such as cardiac issues, most traditional life insurance providers will likely deny your application.
A back injury that doesn’t affect your life expectancy won’t likely affect your life insurance rates. But conditions such as PTSD, anxiety, or depression could, says Mike Raines, owner of Raines Insurance Group.
Since underwriting processes vary among life insurance companies, it’s challenging to pinpoint disabilities that will automatically result in an application denial. However, these conditions could affect your rates or your ability to get coverage at all:
But generally, if you’re in good health aside from your disability, insurance companies might be willing to approve a life insurance policy—unless you’re on high doses of pain medications or narcotics that you may be addicted to.
While underwriting guidelines vary among companies, the life insurance underwriting process revolves around predicting your life expectancy (called mortality by insurers). You’ll be grouped into a life insurance underwriting class depending on your health and other factors that can affect your lifespan. The underwriting class will help determine your rate.
You can do a few things to increase your chances of receiving a more affordable rate and qualifying for the coverage you need.
The best strategy is to work with an experienced life insurance agent who will know which companies are most likely to offer coverage for those with your condition. They should be able to anonymously shop your application around to see who’s willing to offer coverage.
Life insurance buyers with disabilities should not try to go it on their own by getting quotes online and submitting applications that might be denied. Denials go on your record and can make it even more difficult to buy life insurance.
Suppose someone had a back injury and they are now disabled. Let’s say they were only making $20,000 a year before their injury and are now on disability. In that case, the insurance company may limit the coverage to a small amount.
On the other hand, suppose someone runs a family business and has a net worth of $2.5 million. In this case, you would have a much better chance of getting a high amount of life insurance to cover financial obligations and business succession.
“If you can show good financial justification for coverage, you may have a greater chance of approval,” says Raines.
It’s important to focus on your health if you’re applying for life insurance. Since insurance companies favor those in good health despite a disability, it’s wise to get as healthy as possible.
Here are a few ways you can get healthier:
The types of life insurance available for people with disabilities will depend on each individual’s risk, including overall health and life expectancy. Here are some traditional life insurance options that may be available to you.
Term life insurance is a policy where you choose the length of the level term period, such as a 20-year term. Your rates do not change during the level term period. You’ll also choose your coverage amount, such as $500,000. If you die while the policy is in force, your beneficiaries will receive the payout. The policy expires if you outlive the length of your term without renewing the policy.
Term life insurance can be a good choice if you are looking for income replacement for your dependents to pay expenses for a certain number of years. For example, a term life insurance death payout could help cover mortgage payments or college tuition.
Permanent life insurance typically guarantees lifelong protection and a death payout to your beneficiaries, no matter when you die. It also usually provides the opportunity to build cash value, which accumulates on a tax-deferred basis. The coverage length and cash value are why permanent life is much more expensive than term life.
There are multiple types of permanent life insurance, which vary in terms of how much flexibility you have and how cash value builds. Here are some common options:
Related: Term vs. Whole life insurance: What’s the difference?
If you can’t qualify for traditional life insurance coverage, there are other options available. Depending on your needs and unique situation, here are several options worth considering.
With guaranteed acceptance or guaranteed issue life insurance, you can’t be turned down, and there are no medical questions or life insurance medical exam. The trade-off is that coverage limits are minimal and often range from $5,000 to $25,000 of coverage.
These policies also have graded death benefits. Your beneficiaries won’t receive the full death benefit if you pass away within two or three years of buying the policy, unless you died from an accident. It’s a way the insurance companies protect themselves from applicants who are severely ill and know they don’t have long to live.
Some disabled veterans may qualify for life insurance through the US Department of Veteran Affairs. Service-Disabled Veterans life insurance provides low-cost coverage to eligible service members that have a service-related disability. With S-DVI, service members can receive up to $10,000 of coverage. If a service member becomes totally disabled and is unable to work, they can receive supplemental coverage of up to $30,000.
For S-DVI, service members must be in good health, didn’t receive a dishonorable discharge and apply within two years from the date that they were granted service-connect disability, or by Dec. 31, 2022, whichever comes first.
Enrollment for S-DVI coverage ends after Dec. 31, 2022, because a new life insurance program called Veterans Affairs Life Insurance (VALife) has been created.
Veterans Affairs life insurance starts on Jan. 1, 2023, replacing Sevice-Disabled Veterans life insurance offerings.
Veterans with service-related disabilities can receive guaranteed acceptance whole life coverage in $10,000 increments up to $40,000 with VALife. Your coverage with VALife goes into effect two years after you enroll, as long as you’ve kept up with your payments. If you die during the two-year waiting period, your beneficiary will only receive premiums paid plus interest.
All veterans age 80 and younger with a VA disability rating are eligible, and there is no time limit to apply. Veterans 81 or older who have previously applied for a disability rating before age 81 but received a rating after turning 81 are eligible to apply within two years of their rating.
If you have S-DVI, you can remain in that program. Or, you can apply for VALife, and if you do so before Dec. 31, 2025, you can keep S-DVI during the initial two-year waiting period for VALife.
See more: Best Veterans Life Insurance
Many employers have a group life insurance plan that provides affordable life insurance to workers. You typically don’t have to go through any underwriting process in order to receive the base coverage, such as coverage equal to one year of your salary.
Some group life policies may also have add-ons such as a waiver of premium, which allows coverage to continue but eliminates premium payments for employees who have become totally disabled. Typically, to qualify, you must be disabled for at least 180 days and under 60 years old.
Funeral and burial insurance policies are designed to help beneficiaries pay for final expenses such as funeral costs. These policies typically do not require a medical exam, and the application may have minimal health questions or none at all.
Also known as second to die insurance, joint survivorship life insurance insures two lives under one policy. Instead of paying out the death benefit when one person dies, this policy only pays out the death benefit when both policyholders die, such as two spouses.
These policies are often used to pay estate taxes, fund a trust for a child with special needs, or leave a legacy behind to other heirs.
Compare Policies With 8 Leading Insurers
Life insurance is considered valuable for a wide variety of people. Whether you've recently got married, just bought a home or are the parent of young children, the benefits of having a life insurance policy are numerous and significant.
While life insurance is considered advantageous for many (and often a fundamental part of sound financial planning), senior citizens are often overlooked as a segment of the population that could benefit from having a policy.
This can be due to price (seniors are usually saddled with higher premiums) or necessity (seniors typically have fewer financial dependents than those in other age groups). Still, there are benefits to having a life insurance policy that some seniors may find helpful.
If you're a senior considering life insurance then get a free price quote online right now so you know exactly what to expect.
While everyone's personal financial situation is different, there are some times when it may make sense to buck the conventional wisdom. Here are three reasons why seniors should consider life insurance.
Life insurance is often associated with a large lump sum payout upon death (you can potentially get a policy worth millions). But that may not be needed for a senior citizen - and it would be cost-prohibitive to secure anyway.
A cost-effective policy in an amount that could potentially cover end-of-life expenses like a wake, cemetery plot, funeral costs and more could be valuable. Considering the payout amount would be minimal (think under $30,000, approximately) the premium to get such a policy could be reasonable, too.
A death in the family is already difficult to deal with but leaving family members and friends with end-of-life expenses can be avoided. Simply plug in some numbers online now and see how much life insurance coverage you can qualify for. It may be worth setting up.
As mentioned above, seniors may not qualify for large sums of money, particularly those with advanced ages. Still, a small policy with properly designated beneficiaries is better than nothing at all.
This is particularly true for seniors who want to leave something for their family and friends after they die. If they don't have a home or a savings account to transfer to someone a life insurance policy (albeit in a smaller amount) could suffice. It may not be a lot but it's still something. And that may be all you need.
If you're a senior with a mortgage or other outstanding debt, then you already know how difficult it can be to make ends meet. You don't want to pass those financial burdens on to your beneficiaries. With a life insurance policy in place, you may not have to.
Life insurance policies come in all shapes and sizes. It's worth investigating to see if you can find a type that can cover your debt in the event of your death. This could be particularly helpful for seniors who want to leave real estate to their heirs - but still owe a significant amount to their lender. A life insurance policy could potentially bridge that gap.
Shop life insurance providers by clicking here or by using the table below to explore your options now.
Conventional wisdom dictates that seniors don't need life insurance. And it's true that there are likely more benefits for young people, in particular, when it comes to life insurance. While many financial advisers agree that adults should have at least some level of coverage, the particular type you need may vary based on your age.
Everyone's financial situation and long-term goals are different. It's possible that a life insurance policy could help. There are policies available for all age ranges that will both protect you and your bank account.
Speak to a life insurance expert now or consult a financial adviser to see if a life insurance policy is right for you.
Life insurance is generally thought to be advantageous for a wide variety of American adults.
Whether you're young and single, older and married or somewhere in the middle with children, the benefits of having a life insurance policy are multiple and significant. It's even more beneficial if you own a home, have debt or are anticipating major expenses in the future. Those benefits, however, range substantially and are often specific to the individual policyholder's personal financial situation and long-term goals.
One group that is often not thought of as benefiting from life insurance protections is senior citizens. Because of the sometimes costly price of securing a (minimal) policy at an advanced age, it's thought that life insurance isn't worthwhile.
But, just like all of the other groups mentioned above, life insurance can benefit seniors, too. It just may not be for the same reasons as those in other demographics.
If you're a senior considering life insurance then start by getting a free price quote online so you know exactly what to expect.
The pros of having a life insurance policy for seniors are often specific to each individual. Here are three benefits that are broadly applicable:
If you're a senior with little to no savings to pass on or a home to leave your family, then a life insurance policy may be able to help. For a relatively inexpensive cost each month (premiums range based on age and health), you may be able to secure a policy for tens of thousands of dollars. That could then be left to your beneficiaries in the event of your death.
Granted, a policy worth $20,000-$30,000 may not sound like a lot, particularly when payouts range up to and past $1,000,000. But it's still better than nothing. If it can be locked in at a low rate then it's probably worth pursuing.
Answer a few simple questions online now to get a free price estimate.
A death in the family is already difficult to deal with. But the financial burden caused by end-of-life expenses like a wake, funeral and burial compound the issue.
Fortunately, a conservative life insurance policy in an amount that can cover these costs may be available for many seniors. Considering that the coverage amount is minimal compared to more robust, comprehensive policies, the premium tied to such a policy can potentially be affordable.
Know what you can afford and then see if you can get coverage for that amount. It may not be a policy worth millions but that's not what you'd need for these sorts of expenses anyway.
What will your financial situation look like after your death? If there will be significant outstanding debt left to your loved ones then you may want to get a life insurance policy to help make those payments.
Life insurance can be used for almost anything so if you get a plan now and wind up paying down the debt before you have passed you can always cancel the plan - or keep it and have your beneficiaries use it for something else.
But if you have significant debt with no clear pay-off date? It may make sense to secure a policy now so they know they won't get stuck with costly payments. Compare rates and providers now by using the table below.
Life insurance for seniors is often thought of as expensive and not worth it. But as shown above, depending on your personal circumstances and goals, a policy may be both cost-effective and valuable.
Do the math, review your options and speak to a life insurance provider to determine if it makes sense for you.