Disability insurance can be a safety net for employees in California. When employees have non-work-related accidents that prevent them from working or earning a living, their earned income is protected. Disability insurance benefits include paid sick leave, short-term disability benefits, and long-term disability benefits.
Given the high number of Americans living with disabilities, getting disability insurance is a smart move for people who support themselves and their families through their jobs. Long-term disability (LTD) insurance in particular is extremely beneficial for employees who might experience a serious illness or injury. While California does have a short-term disability program that pays up to 55% of your wages for up to a year, California does not have a long-term disability program. Social Security disability and SSI disability, which are notoriously hard to qualify for, are the only other options for long-term disability benefits in California.
Long-term disabilities can continue anywhere from five years to the remainder of an individual’s life. However, only 30% of American workers in private industry currently have access to employer-sponsored long-term disability insurance coverage through their employers.
Typical group long-term disability (LTD) benefits start when sick leave and short-term disability benefits are exhausted, and it replaces about 60% of one's pay. In contrast, Social Security disability benefits are based on lifetime earnings, and the average monthly payment in 2018 is $1,200 per month (up to a maximum of $2,788 per month). SSI pays even less; the federal monthly payment for 2018 is $750 per month if you have no other income, plus California pays a small state supplementary payment to most SSI recipients.
Here are some important facts to understand if you are looking to insure and protect yourself against disability.