California Long-Term Disability Insurance

Disability insurance is a safety net for all employees in California. In case of an accident that would prevent the beneficiary from working or earning, his earned income is protected. 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 would experience a serious illness or injury. According to the American Health Insurance Plans, LTD can continue anywhere from five years to the remainder of an individual’s life. However, only 30 percent of American workers in private industry currently have access to employer-sponsored long-term disability insurance coverage.Typical group long-term disability (LTD) benefits start when sick leave and short-term benefits are exhausted, and it replaces about 60 percent of pay.  Therefore, as it is best to prepare for days of necessity, long-term disability insurance is the best protection against disability. So how exactly does one go about getting an LTD insurance? Here are important facts to understand if you are looking to insure and protect yourself against disability.

• How to get LTD – This can be obtained either by a group or individually. Group coverage can be offered through an employer, professional group or association.
• Eligibility – For employees whose company offers the long term disability coverage, the individual must work for a specified period of time known as a service wait. For professional or association-affiliated LTD coverage the individual must be a member of the group for a set period of time.
• Price of LTD – For individual LTD coverage, you will be responsible for the entire cost of insurance. In group LTD coverage, you may be responsible for no cost, a percentage of the cost or a set premium. With employer-sponsored LTD coverage, you may be responsible for the amount that is above what the employer elects to pay.
• Coverage - LTD coverage can last from one year to age of retirement – usually 65. However, consult the summary plan description to verify the number of years covered by the insurance policy.

Also, the LTD coverage only includes wage replacement not health coverage. In employer-sponsored LTD coverage, the employer may have long term disability eligibility to determine continued eligibility for other benefits such as health and life coverage.

• Pre-Existing Condition Exclusionary Period - A pre-existing condition is any medical condition for which “medical care” was received three to six months prior to the coverage effective date. LTD plans may have a pre-existing conditions exclusionary period. During this period of time, an individual's prior medical condition(s) will not be covered by the policy.
• Other Benefits – Getting an LTD does not preclude the employee from availing other benefits program such as State Disability Insurance or Social Security Disability Insurance. Also, employees whose hours are reduced because of a disability may be eligible to receive partial benefits.