Woman Suddenly Loses Social Security Benefits, Gets Hit With $20,000 Bill

A woman was shocked to find out her Social Security benefits had been stripped away and she owed the Social Security Administration $20,000.
It happened after Karen Williams decided to be responsible and get life insurance, she told NPR. Williams, a 63-year-old disabled woman who lives in Philadelphia, was scared of having her children take on the burden of paying for her funeral in case she died.
Read more: Rates Are Still High for These High-Yield Savings Accounts
So she bought life insurance, unaware of how it played a role in the Supplemental Security Income (SSI) asset limit.
A sign outside a Social Security Administration building in Burbank, California. A woman was served a $20,000 bill after losing SSI benefits because she bought a life insurance policy. A sign outside a Social Security Administration building in Burbank, California. A woman was served a $20,000 bill after losing SSI benefits because she bought a life insurance policy. VALERIE MACON/AFP via Getty Images)
Under the Social Security Administration, SSI supports those living with disabilities in America with monthly checks. However, the program hasn’t updated some of its rules for many years, including the one that stipulates you cannot have any assets over $2,000.
Williams’ life insurance policy, which covered $10,000 in funeral expenses and had a cash value of $1,900, put her over the threshold. That’s because combined, the $1,900 plus the $260 Williams had in her checking account went above the asset limit, despite Williams having little financial resources to keep her afloat.
Read more: Checking Account vs. Savings Account: Which is Best for You?