Social Security is more than just a retirement program. It provides important life insurance and disability insurance protection as well.
In June 2012, 56 million people, or about one in every six U.S. residents, collected Social Security benefits. While three-quarters of them received benefits as retirees or elderly widow(er)s, another 11 million (19 %) received disability insurance benefits, and 2 million (4% received benefits as young survivors of deceased workers.)
Workers earn life insurance and disability insurance protection by making Social Security payroll tax contributions:
About 96% of people aged 20-49 who worked in jobs covered by Social Security in 2011 have earned life insurance protection through Social Security. For a young worker with average earnings, a spouse, and two children, that Social Security protection is equivalent to a life insurance policy with a face value of $476,000.
About 91% of people aged 21-64 who worked in covered employment in 2011 are insured through Social Security in case of disability.
The risk of disability or premature death is greater than many people realize. Of recent entrants to the labor force, almost four in ten men (37 %) and three in ten women (31 %) will become disabled or die before reaching the full retirement age.