Social Security Disability

• The Social Security Administration, SSA, sponsors a federal disability program entitled to all American citizens who meet the agency's definitions of disability. Your medical conditions must be scheduled to last longer than one year; terminal illnesses are covered as well. They must have also paid into Social Security and accumulated the required amount of work credits. The SSA requires 40 work credits, with one earned for every $1,120 made in a year; you can earn a maximum of four annually. Benefit amounts, which are based on their lifetime earnings, are paid on the first of each month. If SSA Disability benefits are your only income source, the Internal Revenue Service doesn't consider benefits taxable income.
  
  

Long-Term Disability Insurance

• Long-term disability, LTD, plans pays income benefits for different lengths of time such as several years or permanently. LTD plans can be purchased through insurance companies while your employers may sponsor this type of coverage. Only 40 percent of employers provide LTD coverages, according to Insurance.com. Benefit amounts are based on your pre-disability salaries; payments generally replace 40 to 65 percent of your previous wages according to the Life and Health Insurance Foundation for Education. The IRS taxes your LTD payments if your insurance premiums are paid with pre-tax dollars. Most individually owned LTD plans, however, are funded with your after-tax dollars; therefore your insurance benefits are not considered taxable compensation.
  
  

Medicaid and Medicare

• You can receive medical coverage through government-sponsored health programs such as Medicaid and Medicare. Medicaid is a joint program between federal and state governments; states opting to carry Medicaid must cover you if you meet the program's requirements. Medicaid generally covers low income families but also if you are pregnant, elderly or have disabilities. Medicare covers you if you are 65 years of age or older or have End-Stage Renal Failure and need dialysis. You can receive Medicare coverage before reaching 65 if you are disabled. There are two main parts to Medicare--Parts A and B. Part A is free and it covers hospital care while Part B, which requires monthly premiums, covers regular doctor services.
  
  

Long-Term Care Insurance

• Long-Term Care, LTC, insurance policies pay for services you need if your disabled or elderly that regular health plans don't cover. Some of the services covered by LTC plans include home care, respite care, hospice care, skilled and non-skill nursing care and speech and occupational therapy. Your LTC plans may also cover your transportation expenses to your medical appointments or home renovations to make it more accessible to your disabilities. Care provided in nursing homes, assisted living facilities and adult day health care centers are covered as well. LTC benefits kick in once you need assistance with some of the Activities of Daily Living (ADLs). These are basic everyday activities that you should be able to do on your own. There are six of them: bathing, dressing, eating, toileting, transferring and continence. (see Resources)