Our condolences go out to you if you have recently lost a loved one in your life. In the wake of this unfortunate event, you may soon learn that you were appointed the beneficiary of their life insurance policy. You may appreciate these life insurance payouts especially if you were financially dependent on them when they were still alive. However, if you are a current recipient of Social Security Disability Insurance (SSDI) benefits, you may wonder whether your eligibility will alter in any way. Well, for this, please continue reading to learn how receiving life insurance may affect your SSDI benefits and how an experienced lawyer in SSDI eligibility in New Jersey, at The Law Offices of Sheryl Gandel Mazur, can help determine your options.
Does receiving life insurance affect my SSDI benefits eligibility?
When the Social Security Administration (SSA) initially determines your eligibility for SSDI benefits, they may look at the severity of your disability, the possibility of performing your previous work, and the possibility of adjusting to other forms of employment to maintain substantial gainful activity (SGA). This is because SGA is a limit to how much you can earn per month while collecting SSDI benefits. As of 2024, this monthly limit is $1,500, or $2,590 if you are blind.
With that being said, your receiving life insurance payouts may be categorized as your receiving a new source of income. So, while life insurance may not completely wipe away your SSDI benefits eligibility, it may at least reduce the amount you are paid each month. As of 2024, the maximum amount of monthly SSDI benefits is $3,822. And as a general rule of thumb, it is said that for every $1 you receive in life insurance payouts, your monthly SSDI benefits may be reduced by 50¢.
What if I receive living life insurance benefits?
It may be a completely different story if you are not the beneficiary of a loved one’s life insurance policy but are rather collecting from your own life insurance plan. That is, you may draw benefits from your own life insurance plan while you are still alive if yours has accelerated death benefits or critical illness benefits. In other words, you may have been diagnosed with a qualifying illness or disability and thereby wish to take advantage of this portion of your plan.
But if you do so, you must understand that your SSDI benefits eligibility may be directly affected. It is rather likely that the SSA may no longer find you financially qualified to receive SSDI benefits payments with the amount of life insurance payout you get every month. With that, please know that the same may apply if you take out a loan against the cash value of your life insurance policy. So before taking any of these actions, it is in your best interest to carefully review the underwriting of your policy.
At The Law Offices of Sheryl Gandel Mazur, we share the same goal as you, which is likely to achieve adequate financial support. So please do not hesitate to work with a skilled lawyer in SSDI eligibility in New Jersey.
