Survivor Benefits: A Guide To This Often Overlooked Insurance Add-On
Many people think Social Security provides only retirement checks but they are just one form of Social Security. When planning, your survivor may also be entitled to benefits when planning for your life insurance needs. It is important to take into account what your survivor will be entitled to from Social Security.
Part of the Social Security tax you pay goes toward survivor's insurance. In fact, the value of the survivor insurance you have under Social Security may well be greater than the value of your commercial life insurance. When someone who has worked and paid into Social Security dies, survivor benefits can be paid to certain family members, including widows, widowers (and divorced widows and widowers), children, and dependent parents.
You, along with millions of other people, earn survivor insurance by working and paying Social Security taxes. Right now, 98% of the children in this country could get benefits if a working parent should die. In fact, Social Security pays more benefits to children than any other federal program.
Eligibility For Survivor Benefits
When you die, certain members of your family may be eligible for survivor's benefits if you paid Social Security taxes and earned enough "credits." You can earn a maximum of four credits each year. The number of credits you need depends on your age when you die. The younger you are, the fewer credits are needed to be eligible for survivor benefits, but nobody needs more than 40 credits (10 years of work.)
Under a special rule, benefits can be paid to your children and your spouse who is caring for the children even though you don't have the number of credits needed. They can get benefits if you have credit for one-and-one-half years of work in the three years just before your death.
Who Can Get The Benefits?
When you die, Social Security survivor benefits can be paid to your:
Widow or widower-65 or older or reduced benefits as early as 60.
Widow or widower at any age if she or he takes care of your child under 16 or disabled and who gets benefits.
Unmarried children under age 18 or up to age 19 if they are attending elementary or secondary school full time. (Under certain circumstances, benefits can also be paid to your stepchildren or grandchildren.)
Dependent parents at age 62 or older.
There is a special one-time payment of $255 that can be made when you die if you have enough work credits. This payment can be made only to your spouse or minor children if they meet certain requirements.
If you have been divorced, your former wife or husband generally can get benefits under the same circumstances as your widow or widower if your marriage lasted 10 years or more.
Benefits paid to a surviving divorced spouse who is 60 or older will not affect the benefit rates for other survivor getting benefits.
How Much Are The Benefits?
How much your family can get from Social Security depends on your average lifetime earnings. The higher your earnings, the higher their benefits will be.
Tip: To get an estimate of the Social Security survivor benefits that could be paid to your family, call Social Security at (800)-772-1213 and ask for a Form SSA-7004 (Request for Personal Earnings and Benefit Estimate Statement.) Within four to six weeks after you complete and return the form to Social Security, you will receive a statement showing an estimate of survivor benefits that could be paid, as well as estimates of retirement and disability benefits and other important information. There is no charge for this service.
How To Apply For Benefits
How you sign up for survivor benefits depends on whether or not you are getting other Social Security benefits.
No Other Social Security Benefits
You should apply for survivor benefits promptly because, in some cases, benefits may not be retroactive. The rules are complicated and vary depending on your situation, so you should talk to a Social Security representative about the options available to you.
Getting Other Social Security Benefits
If you get Social Security survivor benefits, the amount of your benefits may be reduced if your earnings exceed certain limits. There are no limits once you reach 70.
Tip: To find out what the limits are this year and how earnings above those limits reduce your Social Security benefits, contact Social Security to request the leaflet How Work Affects Your Social Security Benefits (Publication No. 05-10069). There are no limits once you reach 70.
Your earnings will reduce only your survivor benefits, not the benefits of other family members.
If You Remarry
In general, you cannot get survivor benefits if you remarry. But remarriage after 60 (50 if disabled) will not prevent benefit payments on your former spouse's record. And, at 62 or older, you may get benefits on the record of your new spouse if they are higher.
Medicare
As you know, Medicare is a health insurance plan for people who are 65 or older. (People who are disabled or have kidney failure also can get Medicare.) Medicare has two parts-hospital insurance and medical insurance. (Most people have both.)
Hospital insurance, sometimes called Part A, covers inpatient hospital care and certain follow-up care. You paid for this as part of your Social Security taxes.
Medical insurance, sometimes called Part B, pays for physicians' services and some other services not covered by hospitals. Some people are already getting Social Security benefits when they turn 65, and their Medicare starts automatically. Others must file an application. For more information, call SSA to ask for the booklet Medicare (Publication No. 05-10043).
Confidentiality Of Your Personal Information
Social Security keeps personal information on millions of people. That information, such as your Social Security number, earnings record, age, and address, is kept confidential. Generally, SSA will discuss this information only with you. SSA needs your permission if you want someone else to help with your Social Security business.
If you send a friend or family member to an SSA office to conduct your Social Security business, send your written consent with them. Only with your written permission can SSA discuss your personal information with them and provide the answers to your questions.
In the case of a minor child, the natural parent or legal guardian can act on the child's behalf in taking care of the child's Social Security business.
The privacy of your records is guaranteed. There are times when the law requires Social Security to give information to other government agencies to conduct other government health or welfare programs-such as Aid to Families with Dependent Children, Medicaid, and food stamps. Programs receiving information from Social Security are prohibited from sharing that information.
