What is presumptive disability and is it covered?
According to the Social Security Administration, approximately one in four 20-year-olds will experience a disability for 90 days or more before they reach 67.1 That’s why long-term disability insurance is a key piece of the financial puzzle: it can help replace a portion of your income if you become too sick or injured and are unable to work for an extended period.
But whether you’re relying on Social Security Disability Insurance (SSDI) or thinking of getting a private plan, it’s important to know how disability insurance works and understand the key terms and provisions used in most policies. This article focuses on one of the key features of most long-term disability policies – presumptive disability:
What this feature is, and how it benefits disability insurance policyholders
Getting presumptive disability benefits through Social Security
How to get more guidance on disability insurance
What is presumptive disability coverage?
SSDI, and many long-term disability insurance policies, contain a "presumptive disability provision" that covers medical conditions so severe that they are obviously or easily presumed to be total disabilities with virtually no chance of full recovery.2 These medical conditions are defined in the policy contract and typically include, but are not limited to:3
Total loss of sight in both eyes
Total loss of hearing
Bed confinement or immobility
Leg amputation at the hip
Terminal illness
Certain neurological conditions
The key benefits of a presumptive disability provision
Simply put, presumptive disability coverage makes the process of claiming and receiving benefits much easier when the policyholder suffers a severely disabling condition. These benefits include but are not limited to:
No waiting period:
Income replacement payments typically start right away, bypassing what’s known as the disability insurance elimination period, a period of 90 or more days (depending on the policy) before benefits start.4
Benefits can last a lifetime:
Importantly, it can also affect how long coverage lasts. Policies typically pay benefits for either a set number of years (e.g., two, five, or ten years) or until retirement age (e.g., 65 or another age defined in the policy contract). However, some policies pay lifetime benefits when there's a presumptive disability.5
Simplified claims process:
With many types of illnesses or injuries (for example, early-diagnosed cancer with a high cure rate), questions about a person's ability to continue working can slow the claims process. But because the criteria for a presumptive disability are well-defined in the policy – and aren't dependent on the policyholder's ability to work – claims processing is simpler and faster.6
You can return to work:
With most injuries or illnesses that cause disability, once an individual can return to work, benefits stop. With a presumptive disability, benefits often continue even if you are able to return to work in some capacity.7
It's important to note that the specific benefits and criteria for this provision vary from one insurance policy to another. When buying a policy, it’s important to have your financial professional explain the terms and conditions of your disability policy so that you understand how it works in case of a presumptive disability and other scenarios.
How presumptive disability compares to other severe disability provisions
Many long-term disability insurance policies include coverage variations for other classes of severe disability – such as total disability and catastrophic disability. Each class is defined by different criteria for eligibility and benefits:
Total Disability
If your disability is classified as a total disability, it means that you will not be able to work for an extended period of time, whereas presumptive disability means that there is virtually no chance of a full recovery. The amount of the disability benefits payments is typically the same for both classifications (policies vary but typically have a maximum benefit of about 60% of your gross pay). However, total disability claims are subject to an elimination (or waiting) period, while a presumptive disability claim is eligible for immediate disability benefits. In addition, those claiming total disability may be subject to a limited benefit period, while those claiming presumptive disability may receive disability benefits for life, depending on the terms of the policy.8
Catastrophic Disability
Many policies include a rider, or optional provision, for catastrophic disability coverage, which pays added benefits beyond what's paid for a presumptive or total disability. The amount varies by policy, but the criteria for classification as a catastrophic disability typically include:
having a presumptive total disability; or
having a cognitive impairment; or
not being able to perform two activities of daily living (ADLs), such as bathing or using the bathroom.
While a covered catastrophic disability provides an additional payment beyond your monthly disability benefit. It's important to note that the benefit period is typically not extended. So, unlike benefits for presumptive disabilities – which may last for life - the benefit period for catastrophic disabilities is limited to the policy's normal benefit period.9
Presumptive disability benefits from Social Security
If you have worked for at least ten years and are diagnosed with a presumptive disability, you may be eligible for Social Security Disability Insurance (SSDI) benefits. SSDI has a notably stringent application process, which requires extensive documentation and can take months to complete and submit. Only 35% of initial SSDI claims are approved10, and while you can appeal, the process can take years.
However, if you have a presumptive disability, you may qualify for expedited Supplemental Security Income (SSI) benefits, but these are not guaranteed.11 If approved, this program will provide payments for up to six months while you are waiting for the Disability Determination Services (DDS) to make a final decision.12
Social Security benefits can help, but may not be enough
A lot of people think that if they are (potentially) eligible for Social Security disability benefits, they don’t need a separate long-term disability insurance policy. But it’s important to know that the average SSDI benefit in 2024 is $1,537per month,13 while a disability insurance policy can pay up to about 60% of your gross income (and benefits paid are typically tax-free).14 The bottom line is, most people cannot live on SSDI benefits alone, but a long-term disability policy can pay enough to help maintain your family’s lifestyle. That’s why many financial professionals recommend that people bolster their financial safety net with a disability insurance policy if at all possible.
How to get the disability coverage you need
Most – but not necessarily all – long-term disability insurance policies include coverage for presumptive disabilities. However, it's not always part of the basic policy contract and is often offered as an extra-cost rider. Before purchasing your policy, be sure to ask your financial professional whether your policy contains a presumptive disability provision, how it works, and what it costs, if anything.
Why so many people choose Guardian disability insurance
Investopedia named Guardian the Best Overall Disability Insurance Company for 2023 because of our wide range of plans and options to meet the needs of individuals and businesses.15 Our Catastrophic Disability Benefits rider is a good example: it provides extra funds – up to 100% income replacement – if you are functionally impaired or irrevocably disabled. And Guardian’s Enhanced CAT also adds a compound 3% cost-of-living adjustment.**
Guardian has been helping families protect their financial well-being for over 160 years. With high scores for financial soundness from independent rating agencies,* our 12 million customers can trust us to be there when they need us most.15
If you are interested in a disability insurance policy or need assistance with an existing policy, please speak to a Guardian financial professional. Here’s how to find someone near you: