ULPT REQUEST: insurance loophole to retire early?

Posted by Comfortable_Visual73@reddit | UnethicalLifeProTips | View on Reddit | 29 comments

I met someone who used to work at a large insurance company. He said that when he was younger he became “permanently disabled” (doctor diagnosed), started receiving insurance payments, and that basically funded early retirement.

He also mentioned an annuity and life insurance, but I’m unclear how this could fund a retirement lifestyle.

The story sounded like he found an “unethical” hack to retire early through insurance. So I knew the best place to ask if this is possible;)

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gringogidget@reddit

Insurance adjusters are ruthless.

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Law_hacker_1000@reddit

This is why the legal profession exists and why you hire a lawyer

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penywisexx@reddit

I am a permanently disabled veteran, I look fine and feel fine most of the days. Some days I can barely get out of bed due to arthritis and have debilitating migraines that last for days from a TBI. I’ve been “retired” since I was 30 or so, I bring in around $6000 a month between SSDI and my VA disability. I wouldn’t call it an insurance loophole. I think most people that become permanently disabled young and have an early retirement like that (and continue to work) are likely medically retired from the military. I could work if I wanted to, but finding an accommodating job would be difficult.

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brainhack3r@reddit

I think this is one of the saddest things about being a veteran and that the movies don't really cover.

It's always Rambo saving the world but it's never the world supporting Rambo once he gets PTSD and a severe back injury preventing him from working.

Then he's just a "burden on society" meanwhile President bone spurs starts another war in the middle east and ... repeat.

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tomtomclubthumb@reddit

That's literally what the first movie is about.

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emmakobs@reddit

$6K a month is fantastic

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tomtomclubthumb@reddit

IF the payments are compensation for being unable to do a specific job then this is possible.

I know someone who got a partial pension for this because he "couldn't do the job".

Got about 35 years of payments from that before he even retired and did loads of other jobs meanwhile.

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Megalocerus@reddit

Could this be job benefit disability insurance, or a personal AFLAC type disability income policy? SSDI is not the only disability available.

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wilcojunkie@reddit

I have a distant relative who lives in Wisconsin who has MS and is wheelchair bound but her boyfriend and caretaker also has MS but is on disability after working in the private sector. He's been on disability for like 20 years even though he works outside on the farm they own all the time, they constantly go on vacation to casinos and at one point they had a nice RV to travel in. I have no idea how to report stuff or what proof the state would have to have but something's been fishy about their situation for years.

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Goldenbeardyman@reddit

Look up income protection policies

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GoodMilk_GoneBad@reddit

It's possible and I'm sure it's ben exploited.

Basically otherwise healthy people go out on disability while working then get approved for social security disability. The employer must still provide benefits and a reduced salary until the person is no longer deemed disabled or they reach retirement age.

It's not necessarily easy. Insurance companies suck and qualifying for SSD can take years even with a lot of medical documentation.

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Undrwtrbsktwvr@reddit

Find a legal and legitimate reason to sue your employer. I’ve seen people do it many times. I know a few people who have done it more than once!

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xtrahandy@reddit

Annuity and life insurance sounds like some whole life policy. Working for an insurance company did he mention disability insurance? That's not a loophole but a specific type of policy.

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Comfortable_Visual73@reddit (OP)

He worked for and retired early from New York Life when he was younger if I recall correctly.

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caliphis@reddit

Anything that does not involve you actually being disabled would be fraud.

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BoomGoesTheFirework_@reddit

And on permanent disability, you do get checks. But they aren’t that big. And you lose the coverage if you OR your spouse has a total combined net worth of like 10k. It’s not pretty and basically keeps disabled people in poverty via their lifeline.

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MjrGrangerDanger@reddit

Not every policy, or SSD in the US has the 10k cutoff. There are often earnings limitations (you have to have some path to return to work).

You're probably thinking about SSDI which is related to income and not social security work credits.

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inertial-observer@reddit

Supplemental Security Income (SSI) - income based disability payments through Social Security for those who do not have enough work credits for SSDI or whose work credits aren't sufficient. Resource/asset limit is $2000

Social Security Disability Insurance (SSDI) - Social Security disability payments for those who have enough work credits to qualify. No resource/asset limits but you can't earn more than the "Substantial Gainful Activity (SGA)" threshold if you work. This amount is $1690 for 2026 (higher if blind).

You can get both SSI and SSDI if your SSDI amount is lower than the SSI amount.

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MjrGrangerDanger@reddit

Thanks for the correction, I was sleepy LOL

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Responsible_Dentist3@reddit

You're asking us how to become permanently disabled? Get some bad condition like cancer, or get in a bad car wreck, or intentionally trigger chron's or something. Maybe you can fake it.

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Purple_Fabuloso@reddit

I’m starting chemo next week and my dr said plenty of people on chemo work. I’m already exhausted from my fucked up blood.

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NekoBerry420@reddit

If it were that easy, everyone would do it.

You'd have to somehow convince a doctor to diagnose you with a disability that makes it difficult or impossible to work, provide a shitload of documentation, and probably argue in front of a judge.

If my legit disabled RL friend can't get it, it's not likely you will without committing an incredible amount of fraud.

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MacintoshEddie@reddit

Generally speaking that by itself wouldn't really be a good deal.

Usually amounts are two pubes above poverty, and things like rent controlled low income housing often has a years long wait list and...isn't great.

If you have a low standard of living, sure, I guess, but pretty often your budget would be measured in the dozens of dollars per month. Such as getting a $1600 cheque every month and then your cost of living adds up to $1300 for rent+utilities+basic food.

Insurance fraud in this manner is a lot less potentially lucrative than a settlement, like where a company just pays someone half a million dollars to fuck off and never bother them again because that's easier than a long and drawn out court battle.

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