There are some professionals and other middle to high income individuals who believe social security will provide them with adequate benefits in the event of a disability. Here are two reasons that is an incorrect and dangerous belief.
1. To be eligible for social security benefits, the individual must suffer a severe enough disability that they cannot engage in any gainful activity and the disability must be expected to last at least one year or result in death. Compare that to a true own-occ definition of disability in individual disability insurance policies that will still pay a benefit even if the individual goes to work in another occupation. Individual disability insurance policies will also pay partial disability benefits.
2. Even if the insured meets the stringent definition of disability, the monthly disability benefit is capped at about $1,400. This means that those earning $100,000 or more can expect to receive a paltry $16,800 in disability income benefits from Social Security. Compare that to individual disability insurance policies that will insure around 60% of annual income up to a cap of $30,000/month, depending on income, occupation, and state of residence.