How to Insure Your Income: Other Supplements

One of the problems private insurers have is providing disability income for middle- and low-income families without overinsuring. It is possible for a low-income worker to receive more in disability benefits than his or her earned income. Because of this, many insurance companies take pains to account for benefits provided by Social Security or workers' comp when writing disability income for middle and low income groups.

The problem here: Social Security and your insurance company get into a battle to see who can be more tight-fisted. If this happens, the only sure loser is you. You can end up with your insurance company docking you for Social Security benefits you don't receive.

To solve this problem, some insurers use social insurance supplements. These supplements may be included as part of the disability income policy benefits, or they may be added to the policy by rider.

Under this supplement, total disability benefits will be paid until workers' compensation or Social Security benefits begin. Also, if -- for any reason -- government benefits stop, the insurance company will begin the monthly payments again. The benefits are only paid during the benefit period, and only if you are still disabled.