During your working years, disability insurance covers loss of income due to injury or illness. After you retire, you no longer need this specific coverage. Each insurer develops its own criteria for payment plans based on a percentage of your regular income. These insurance plans typically don't pay 100% of all lost wages. The average rate of payout is between 60 to 70% of the average salary.
Another option for disabled seniors is Supplemental Security Income (SSI) if they live on limited income at age 65 and over. Some seniors may receive additional income if they qualify for federal and state financial assistance programs. Disabled Americans who already receive SSI benefits before retirement age automatically start to see retirement benefits once they turn 65.
Different types of disability coverage exist for different situations. Short-term disability coverage pays workers lost wages for a limited period, such as up to two years. Long-term disability policies deal with more restrictions and longer waiting periods up to 90 days before receiving benefits.