Does Life Insurance Affect Social Security Disability Benefits?

Shawn Plummer

CEO, The Annuity Expert

Does Life Insurance Affect Social Security Disability Benefits?

No, life insurance does not affect Social Security disability benefits. This is because withdrawals from a life insurance policy are typically considered loans rather than income. Therefore, they do not impact the benefits received from Social Security disability.

Understanding the Relationship

Key Points

  1. Nature of Withdrawals: Withdrawals from life insurance are loans and do not count as taxable income.
  2. Non-Interference: Since these withdrawals are not income, they don’t affect the eligibility or the amount of Social Security disability benefits.
Life Insurance Withdrawals


Suppose John has a life insurance policy and takes a loan against it. In that case, this action does not affect his Social Security disability benefits, as the loan is not considered income.

Related Reading: Can You Be Denied Disability for Having Too Much Money?


In summary, life insurance does not impact Social Security disability benefits since policy withdrawals are treated as loans, not income. This ensures that individuals relying on disability benefits are not penalized for accessing their life insurance funds.

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Shawn Plummer

CEO, The Annuity Expert

Shawn Plummer is a licensed financial professional, insurance agent, and annuity broker with over 14 years of first-hand experience with annuities and insurance. Since beginning his journey in 2009, he has been pivotal in selling and educating about annuities and insurance products. Still, he has also played an instrumental role in training financial advisors for a prestigious Fortune Global 500 insurance company, Allianz. His insights and expertise have made him a sought-after voice in the industry, leading to features in renowned publications such as Time Magazine, Bloomberg, Entrepreneur, Yahoo! Finance, MSN, SmartAsset, The Simple Dollar, U.S. News and World Report, Women’s Health Magazine, and many more. Shawn’s driving ambition? To simplify retirement planning, he ensures his clients understand their choices and secure the best insurance coverage at unbeatable rates.

The Annuity Expert is an independent online insurance agency servicing consumers across the United States. The goal is to help you take the guesswork out of retirement planning and find the best insurance coverage at the cheapest rates

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