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Disability Insurance Arizona: Protecting Your Income and Future

Disability insurance Arizona

Your most valuable asset is the ability to make a living. Disability insurance pays a part of your income if you can’t work long because of an illness or injury.

If you’re young and healthy and work at a desk, you may think the likelihood of being out of work for months or years of work due to an injury or illness is remote.

However, according to the Social Security Administration, more than one in four 20-year-olds will have some disability for 90 days or more before they reach 67.

When people think of disabilities, they think of severe injuries like a spinal cord injury or loss of limbs due to a horrific accident. Most disability claims are from back injuries, cancer, heart attacks, diabetes, or other illnesses. 

These things can affect anyone at any time and prevent you from working while undergoing treatment.  How long could you make it without a paycheck? Chances are you wouldn’t make it very long, which is why you were working in the first place. This is where disability insurance steps in.

Why You Need Disability Insurance in Arizona

No one likes to think about the possibility of becoming disabled and being unable to work. However, statistics from the Social Security Administration revealed that more than one in four 20-year-olds will experience a disability lasting 90 days or more before age 67.

Disabilities can arise from various causes, such as back injuries, cancer, heart attacks, diabetes, and other illnesses affecting anyone, regardless of age or occupation. The impact of a disability on your ability to work and earn an income can be devastating, making disability insurance a vital asset.

Types of Disability Insurance in Arizona

Short-Term Disability (STD)

Short-Term Disability (STD) insurance pays you a portion of your income if you’re unable to work due to sickness or injury. In Arizona, the STD benefit provides approximately 66.67% of your weekly salary, up to a maximum of $1,500 per week. The average STD policy in Arizona lasts for six months. It’s important to note that STD is not a governmental program; it’s privately funded, usually through your employer.

Long-Term Disability (LTD)

Long-Term Disability (LTD) insurance is another type of coverage that protects an employee from loss of income if they cannot work due to illness, injury, or accident for a long period. In Arizona, LTD benefits can be paid until age 65 or until you can return to work after your disability. Depending on your plan, LTD may pay you for a specific number of years, like two years or five years, or until you turn a specific age, like 65.

Social Security Disability Insurance (SSDI)

Social Security Disability Insurance (SSDI) is a federal program that provides monthly payments to people who have worked, paid Social Security taxes, and now have disabilities that prevent them from working. To qualify for SSDI, you must be unable to work because of a medical condition that is expected to last at least 12 months or result in death.

Supplemental Security Income (SSI)

Supplemental Security Income (SSI) is a program run by the Social Security Administration (SSA) that provides monthly cash payments to help you pay for your basic needs. If you have a disability, are blind, or are over age 65, and have low income and limited resources, you may qualify for SSI. A single person can get up to $914 per month in benefits.

Understanding the different types of disability insurance available in Arizona is crucial in making informed decisions about your financial security. Whether it’s STD, LTD, SSDI, or SSI, each type of disability insurance offers unique benefits designed to provide financial support when you’re unable to work due to a disability. As always, it’s important to consult with a professional insurance agent to discuss your specific needs and circumstances.

Remember, insurance isn’t just about policies and premiums; it’s about peace of mind. It’s about knowing you’re covered when life takes an unexpected turn. At Blake Insurance Group, we’re committed to helping you navigate the complexities of disability insurance so you can focus on what matters most: your health and well-being.

Eligibility Criteria

Short-Term Disability (STD)

To be eligible for Short-Term Disability (STD) insurance, you must be unable to work for a health-related reason, regardless of whether the injury or illness is work-related. There is typically a waiting period before you can begin receiving benefits, ranging from a few days to a month or more. Some policies may require you to use your sick days before collecting benefits. STD is not a governmental program; it’s privately funded, usually through your employer.

Long-Term Disability (LTD)

Long-Term Disability (LTD) insurance eligibility is determined after a six-month waiting period. You are considered disabled if you are under the care of a licensed physician and are unable to work due to illness, injury, or accident. LTD benefits can be paid until age 65 or until you can return to work after your disability. Depending on your plan, LTD may pay you for a specific number of years, like two years or five years, or until you turn a specific age, like 65.

Social Security Disability Insurance (SSDI)

To qualify for Social Security Disability Insurance (SSDI), you must have earned enough work credits and have a medical condition expected to last at least 12 months or result in death. The number of work credits needed for SSDI depends on your age when your disability began. For example, if you develop a disability before age 24, you generally need six credits earned in the three years ending when your disability starts. If you are between ages 24 and 31, you generally need credits for half the time between age 21 and your disability began. For those aged 31 or older, you must have at least 20 credits in the ten years immediately before your disability began.

Supplemental Security Income (SSI)

To qualify for Supplemental Security Income (SSI), you must have a disability, be blind, be over age 65, and have low income and limited resources. To qualify for SSI benefits, you must have less than $2,000 in countable resources ($3,000 for a couple). The countable income limit for getting SSI is the same as the maximum benefits amount, which is $914 monthly for single individuals.

Benefits of Disability Insurance

Short-Term Disability (STD)

Short-Term Disability insurance typically replaces around 40% to 70% of your income. The exact percentage can vary depending on the specific policy. Still, it generally aims to replace a significant portion of your income to help you maintain your standard of living while you’re unable to work. The duration of benefits can range from three to six months. In some cases, employees who are only partially disabled may be able to work part-time and still receive 100% of their pre-disability earnings for the duration of their claim.

Long-Term Disability (LTD)

Long-Term Disability insurance typically pays benefits equivalent to 40-70% of your income. The benefit is designed to last for many years, potentially even through retirement if needed. The exact duration of benefits can vary depending on the specific policy, but LTD is designed to provide income replacement for an extended period. Some policies may pay benefits until you reach a certain age, such as 65.

Social Security Disability Insurance (SSDI)

Social Security Disability Insurance (SSDI) benefits replace about half of past earnings for a median beneficiary. The benefits are designed to provide a modest but vital income for workers who can no longer support themselves due to a serious and long-lasting medical condition. Payments usually start with your sixth month of disability. Generally, your disability benefits will continue if your medical condition has not improved and you can’t work.

Supplemental Security Income (SSI)

Supplemental Security Income (SSI) provides monthly payments to people with limited income and few resources. The amount paid may not be the same every month as it depends on other income and living arrangements. The federal and state SSI payments may increase to keep up with the cost of living. The benefits are reduced when recipients have other income. For each dollar of unearned income above the first $20 per month, SSI benefits are reduced by a dollar, while each dollar of earned income above the first $65 per month reduces SSI benefits by 50 cents.

Cost of Disability Insurance

The cost of disability insurance is influenced by several factors, including the type of insurance (Short-Term Disability or Long-Term Disability), the individual’s occupation, gender, and location.


An individual’s occupation plays a significant role in determining the cost of disability insurance. Insurance companies base their rates on the amount of risk they’re assuming – the greater the risk associated with an occupation, the higher the premium. For instance, individuals working in physically demanding or dangerous jobs may have to pay higher premiums due to the increased risk of injury.


Gender also impacts the cost of disability insurance. Women can pay up to 40% higher premiums than men for disability coverage. This is because historical data from insurance companies shows that women more often become disabled and unable to work due to conditions including breast cancer, depression, or autoimmune disorders. Disability claims filed by women also tend to last longer than those for men. However, it’s important to note that charging women more for disability insurance coverage isn’t allowed in all states. For example, Massachusetts has passed legislation preventing insurance providers from factoring gender into coverage costs.


Geographic location can also influence the cost of disability insurance. Some states, chiefly in the South and Appalachia, have much higher rates of disability receipt, potentially impacting the cost of disability insurance in these areas.

Premiums for STD and LTD

As for the premiums for Short-Term Disability (STD) and Long-Term Disability (LTD), insurance generally costs between 1% and 3% of your annual income. For example, if your annual salary is $50,000, you could expect to pay between $500 and $ 1,500 per year for your disability insurance. However, these costs can vary depending on the specific factors mentioned above and others, such as the individual’s health and the amount of income they want to replace in the event of a claim.

Claim Process

Filing a claim for disability insurance involves several steps, including preparing the necessary documentation, submitting the claim, and potentially appealing if the claim is denied.

Steps to File a Claim


 **Review Your Eligibility**: Before filing a claim, ensure that you meet the eligibility requirements for disability insurance. This typically involves being unable to work due to a disability.

 **File Your Claim**: You can file a claim for disability benefits by contacting your insurance company or the Social Security Administration through phone, fax, mail, or online. If you’re filing online, you must create an account and follow the steps provided.

**Prepare and Submit Documentation**: You must provide various documents to support your claim. This may include medical records, doctors’ reports, recent test results, proof of birth, proof of U.S. citizenship or lawful alien status (if not born in the U.S.), and any proof of temporary or permanent workers’ compensation-type benefits you’ve received. You may also need to provide a statement about your disability, what you can no longer do, or calendars showing days you’ve had to take off work and why.

**Get a Medical Certification**: Your claim is incomplete until your licensed health professional completes a medical certification.

 **Wait for a Decision**: Once your claim is submitted, the insurance company will review it and decide. This process can take up to 45 days. If your claim is approved, you won’t receive benefit payments until the elimination period ends.

Appealing a Denied Claim


If your disability claim is denied, you have the option to appeal. The first step in preparing your appeal is understanding why your claim was denied. The denial letter should explain how and when to file your appeal. Be sure to mark any deadlines on your calendar, as missing a deadline can result in losing the opportunity to challenge the denial.

If your denial was due to a technical issue, like a missing form, complete it so you can include it with your appeal. Make sure your insurance company isn’t missing any of your medical evidence.

You can generally appeal an LTD denial. You’ll greatly increase your chances for a successful appeal with patience, persistence, and preparation (and sometimes help from an experienced attorney). If you’ve exhausted all your administrative appeals and your LTD insurance claim still hasn’t been approved, you can file a lawsuit in federal court.

Impact of Other Benefits

The impact of other benefits on disability insurance benefits can vary depending on the type of benefit in question.

Social Security Disability Insurance (SSDI) and Other Public Disability Benefits

Disability payments from private sources, such as private pensions or insurance benefits, do not affect your SSDI benefits. However, workers’ compensation and other public disability benefits may reduce your SSDI benefits. If you receive workers’ compensation or other public disability benefits and SSDI benefits, the total amount of these benefits cannot exceed 80% of your average current earnings before you became disabled.

Certain public benefits do not affect your SSDI benefits. These include Veterans Administration and state and local government benefits if Social Security taxes were deducted from your earnings.

Retirement Benefits

Receiving retirement benefits can impact your SSDI or Supplemental Security Income (SSI) benefits. If you are receiving early retirement benefits and successfully proving that you are disabled, your early retirement benefits will stop, and you will begin receiving SSDI benefits in an amount that would be your full retirement age benefit. Your benefit will then seamlessly convert to a full retirement benefit, and you do not have to do anything.

Private retirement benefits usually do not change your SSDI amount. However, your monthly payments may be affected if your pension or retirement plans come from an employer that did not withhold Social Security taxes.

Transition from Disability to Retirement Benefits

Once you qualify for disability benefits, they will continue until you hit full retirement age or your disability improves. When you start getting retirement benefits, they continue for the rest of your life. When you collect disability benefits until your full retirement age, your retirement benefits aren’t reduced permanently. The Social Security Administration applies a disability freeze, meaning the lack of income caused by the disability does not affect your retirement benefits.

Public vs. Private Disability Insurance

Public and private disability insurance programs differ, including eligibility and requirements, coverage and benefits, administration and funding, and the application and approval process.

Eligibility and Requirements

**Public Programs (SSDI and SSI): To qualify for Social Security Disability Insurance (SSDI), you must have worked in jobs covered by Social Security and have a medical condition that meets Social Security’s definition of disability. The number of work credits you need to qualify for disability benefits depends on your age when your disability begins. Generally, you need 40 credits, 20 of which were earned in the last ten years, ending with the year you become disabled.

Supplemental Security Income (SSI) supports those who could never achieve the insured status of the SSDI program.

Private Insurance (STD and LTD): Private disability insurance programs are paid for by an individual or offered as part of an employer’s benefits package through monthly premiums. These insurers sell many types of plans, all with different eligibility, limitations, and payouts. When you sign up for private disability insurance, the insurer may require you to take a health exam first. If you have health issues, the insurance company can charge you more and even deny you coverage.

Coverage and Benefits

Public Programs (SSDI and SSI): SSDI benefits require that a person be disabled. If you are fully disabled and are unable to work, you will continue receiving payments from this program without limitations on how long it will make payments.

Private Insurance (STD and LTD): Private disability insurance companies, like state-sponsored plans, will allow coverage for partial disability. Most private disability insurance policies have a time limit and will cease payments once you reach that time limit, even if you are still disabled.

Administration and Funding

Public Programs (SSDI and SSI): Public Disability Benefits (PDB) are benefits paid under a Federal, State, or local law or plan to workers with temporary or permanent disabilities. The SSDI program is funded through Social Security taxes.

Private Insurance (STD and LTD): Private Disability programs are administered by large commercial insurers. Individual or employer-paid premiums fund these programs. In some states, like California, the State Disability Insurance (SDI) program is funded entirely through mandatory employee payroll contributions.

Application and Approval Process

Public Programs (SSDI and SSI): You should apply for disability benefits as soon as you become disabled. You can complete your application online, call the toll-free telephone number, or visit your local Social Security office. After reviewing your application and the information you provided, a decision will be made on your qualifications for disability benefits.

Private Insurance (STD and LTD): The application process for private disability insurance varies depending on the insurance company. If you are covered under a private plan, your employer’s insurance carrier is responsible for processing and paying benefits on your disability claim. The private plan insurance company will decide on your eligibility.

Disability Insurance and Health Coverage

Disability insurance interacts with health coverage programs like Medicare and the Arizona Health Care Cost Containment System (AHCCCS) in several ways. These interactions are primarily based on eligibility criteria, coverage options, and the potential for simultaneous enrollment.

Medicare and Disability Insurance

Suppose you become eligible for Medicare due to a disability and have received Social Security Disability Insurance (SSDI) for 24 months. In that case, you should automatically enroll in Medicare Parts A and B at the start of your 25th month.

If you are eligible for Medicare due to a disability and are covered by your, your spouse’s, or in some cases, a family member’s job-based insurance, you have a Special Enrollment Period (SEP) to enroll in Part B up to eight months after you no longer have coverage from current work.

However, if you have job-based insurance from an employer with fewer than 100 employees, Medicare is primary. If you delay Medicare enrollment, your job-based insurance may provide little or no coverage.

If you return to work, you can continue Medicare coverage for 93 months after completing the 9-month work period. After premium-free Medicare coverage ends due to work, some people who have returned to work may buy continued Medicare coverage by paying the full premium as long as they remain medically disabled.

AHCCCS and Disability Insurance

The Arizona Health Care Cost Containment System (AHCCCS) is Arizona’s Medicaid program, providing health care coverage for lower-income individuals. A person who is blind or has a disability may qualify for AHCCCS Health Insurance.

AHCCCS also offers a program called the AHCCCS Freedom to Work Program for qualified individuals who are working and have a disability. This program allows individuals with disabilities to earn more while still getting AHCCCS coverage.

If your job offers you health coverage, you can sign up for AHCCCS if your family’s income is low enough for you to qualify. If you lose your AHCCCS coverage due to increased income from work, you will either become eligible for employer-sponsored or private individual coverage.