Social Security Survivor’s Insurance
Social Security Insurance?
Chances are you haven’t really thought about Social Security Benefits as insurance, but that’s what it is. In fact, you may still see OSADI on your paystubs. OASDI stands for Old Age Survivors Disability Insurance. It is a federal program in which a portion of your earnings (6.2% normally), is paid towards your vestment in this program. You need 40 quarters of coverage or 10 years of work to qualify for most benefit. As any other insurance program, payments are guaranteed as long as requirements are met and as long as the fund remains solvent.
This article will focus on Social Security Survivor’s Insurance
I will be talking to you as the person who is actively planning for your family’s protection if you were to die. But the same rules apply if you are the survivor of someone who has passed and has paid into Social Security.
Social Security Survivor Benefits
You need 10 years of work for your family to qualify for Social Security Survivor benefits. If you are a very young worker, there is an exception that may pay out benefits if you worked 1.5 years of your last 3 years of life.
Benefits can be paid to the insured’s qualifying:
- Spouse
- Ex-spouse, if married to insured at least 10 years
- Disabled adult children, if disabled prior to age 22 (normally unmarried)
- Children under 18; or under 19 years and 2 months, if still in high school (unmarried)
- Parents of children under 16, if caring for insured’s child and meet income limits
Payment amounts to a spouse or ex-spouse who qualifies for survivor benefits are not dependent on who else is on the record. Instead, it’s based on the age of the surviving spouse at the time of applying. Survivor benefits can be paid at 100% of the insured’s primary insurance amount if the surviving spouse is full retirement age; or a reduced amount if they are younger that full retirement age. Surviving spouses can apply as early as age 60 or as early as 50, if disabled.
All others on the record share any remaining monies in the insured’s family maximum. That is the maximum amount determined by the agency, to be paid on an insured’s behalf. The more people on the record, the less each person will receive. Children can receive at most 75% of the insured’s primary insurance amount.
In addition, there is a Lump Sum Death Payment of $255 payable to a surviving spouse living in the same household as the insured, at time of his/her death.
You can create an online account at socialsecurity.gov/onlineservices and view your statement. It will tell you if you have enough credits and what estimated survivor payments would look like, if you were to die. It’s good to review this at least yearly, like you would all your financials.
How to Use This Information
Should you rely on Social Security Survivor Benefits when planning your estate? I wouldn’t recommend it. Treat it like an extra blessing, that may or may not be available. One, there is no guarantee how long the program will remain solvents and what reduction on the dollar may be implemented to keep it solvent. Two, there are income limit rules for all recipients under full retirement age. Three, children are only covered until they are 18 or 19 years old. Although adults in the eyes of the law, many children need at least a few more years before they are able to operate independently and fully fund their own lives. They will need your continued support during the interim.
So, it should be considered and you and your family should be aware of the guidelines and possible benefits there. But you need dedicated life insurance that pays out to beneficiaries regardless of age or other circumstances. In addition, life insurance should be enough to maintain your loved one’s standard of living, at the least. If you can afford it, you can use life insurance (in conjunction with a trust), to create a legacy that could last throughout your child’s life and even into future generations.
DISCLAIMER:
This article is strictly for informational purposes and not written on behalf the Social Security Administration or as an employee or contractor representing the agency. All information presented is strictly for educational purposes.
Publications: EN-05-10085 and EN-05-10072 used as references.
