Disability insurance or income replacement insurance are income replacement policies for beneficiaries who are unable to go to work because of an injury or illness. Private disability insurance offered by private companies in California and other US states can be individual or group.
Individual disability insurance is meant for private employees and self-employed which has income replacement up to 70% to 80% of their salary. Group disability insurance offered by private employers typically will have income replacement up to 60% of their salary.
Group insurance is a type of income replacement insurance available for private companies in California that covers a private company’s employees, in a long-term or short-term basis. Generally, the cost of group short-term or long-term coverage is less expensive than the cost of individual short-term or long-term coverage.
Group Short-term Disability Insurance
Group short-term disability insurance is also known as sick leave. Short-term policies typically cover non-occupational illnesses and injuries, with income replacement for six months to one year. Group short-term policies for private companies are designed to cover temporary situations such as illness, injury, or pregnancy. In some cases in California, the number of weeks you’re eligible for this benefit is based upon how many years you worked at a private company.
California Long-term Disability Insurance
California long-term disability insurance policies for private companies provides monthly benefits for employees who are partially or totally disabled by a covered physical disease, injury, pregnancy or mental disorder. They are designed to meet an individual inability to perform the essential duties of his or her occupation for an extended period of time. Typically, California long-term disability covers both occupational and non-occupational illnesses and injuries (24-hour coverage), and since some injuries or illnesses are permanent, a group long-term disability insurance policy may pay income replacement for years. Generally, long-term insurance varies greatly.