Types of Disability Plans

• The most common types of private disability plans available are short-term disability (STD) and long-term disability (LTD). These plans are bought either from insurance companies or through group plans sponsored by employers and professional associations. The government-sponsored disability program, run by the Social Security Administration, is an available option for individuals who cannot qualify or afford private plans. This disability program is available to all American citizens who meet its requirements. Some states provide short-term disability plans for workers as well. Five states -- New Jersey, Hawaii, New York, California and Rhode Island -- provide payments lasting six months or less.
  
  

Elimination Periods

• Each disability plan has "waiting" or "elimination" periods that must be satisfied before benefit payments are distributed. These periods begin at the onset of disabilities and last until benefit payments start. This is done to make sure medical conditions are severe enough to warrant insurance payments. For STD plans, these periods generally last zero to 14 days, while LTD plans can last several months. The Social Security Administration requires applicants to wait five full months before benefit payments kick in.
  
  

Benefit Periods

• Once the elimination periods pass, benefit payments are distributed to the insureds for various lengths of time as well. STD plan benefit periods last for several weeks up to the maximum of two years. LTD plans can pay benefits for periods of two years or for the rest of the insureds' lives. The Social Security disability program pays benefits for one year and longer.
  
  

Payment Amounts

• The benefit amounts of private disability plans are calculated differently from those paid out from the SSA. LTD and STD plans cover percentages of the insureds' pre-disability salaries. These plans typically replace 40 to 65 percent of the insureds' earnings. Disability benefits from Social Security are based on the applicants' lifetime of work, including their earnings, how long they were employed and how much they paid into Social Security. According to the Life and Health Insurance Foundation for Education, the average monthly benefit amount in 2010 was $1,063.
  
  

Workers' Compensation Insurance

• Individuals can receive benefit payments from workers compensation insurance programs. Each state requires employers to carry workers compensation insurance, which pays individuals who suffer job-related injuries or illnesses about two-thirds of their salaries until they return to work. This may be the only source of income for disabled workers, as STD and LTD plans cover disabilities that occur outside the workplace