Disability Insurance
Parent Q&A
Archived Q&A and Reviews
Purchasing disability insurance
July 2002I am looking for advice and recommendations on purchasing disability insurance. It seems like a good thing. How do most people determine their need? What companies, agents, or plans would you recommend? What should I be wary of? Thanks, Jerry
We looked at disability insurance for my husband because his inability to work would be a financial disaster for our family. Unfortunately, what we found is that disability insurance is *very* expensive. We got a quote for nearly $300 a month for it from an insurance broker named Ted Lum in Walnut Creek. He was one of the few brokers who could quote it to us. IEEE also has disability insurance, and it's quite a bargain relatively speaking. You do have to join the IEEE, which is a professional organization for engineers. That costs $75 and you have to fill out a qualifying application. IEEE has an REALLY good deal on life insurance as well. Myriam
11/99
My husband is looking for disability insurance. He's an R.N. and is self-employed as a health care software consultant. Our search for info has been pretty frustrating. Anyone know of an appropriate professional group he could join in order to get a decent individual policy at a decent group rate? Any other ideas?
I can't offer too much advice on disability insurance, though we had a good friend who is an insurance agent look into it and the bottom line was that it was just too costly. I can't remember the exact rate, but it was approximately $60 per month per $1,000 of coverage. So if you wanted coverage that would pay $5,000 per month if your husband became disabled it would cost you $300 per month. Any full service insurance broker can run the numbers for you. If anyone has found something more reasonable - Id like to hear about it too!
To qualify for CA disability you have to have paid into the system. Look at your paystub - if there is an amount withheld for CASDI then you're paying into it. CA state disability lasts a max of one year. It pays 55% of your income, and is very easy to get. You fill out a form and your doctor fills out a form and that's pretty much it. You can go to EDD.ca.gov to apply online, and the process between your initial application and your first check is a few weeks. Federal disability is very different. There is SSDI for people who have paid into the system (FICA on your paystub) and SSI for people who have not, and are also have very limited resources. The application process is pretty onerous and 80% of people who apply get denied. You can appeal once and if you get denied again then you have to have a hearing in front of an administrative law judge. Many people hire an attorney for help with this. The time between your initial application and a hearing can be two years or more. However, it lasts as long as your disability lasts - many people get it for the rest of their life. If you are unable to work due to a disability and you think you will be out for more than one year, I recommend filing for both at the same time. The CA State Disability will come in first, and you can live off that while you wait for your SSI or SSDI application to go through. Hope this helps.
Check out Disability Benefits 101 at https://cadb101.org. The Programs section has a really good overview of the different state and federal cash benefits, health coverage, and work support programs. Best wishes!
As a social worker, I’ve had to advise a lot of clients on disability benefits, but I do not claim to be an expert by any means. California state disability is short term and is based on your income during a certain recent time period. You can typically be on it for up to a year and you can apply for it through the edd.ca.gov website. It is not taxed and approx. 60% of your reported income. Federal disability is long term disability and you apply for it through your local social security office. How much you get depends on how much you have paid into it over the years. It is also not taxed. As long as your disability continues, you can continue to collect it. You are right, short term disability usually pays more than long term. Both require a medical/mental diagnosis verified by a physician. Applying for short term can be pretty straight forward through the website and can be pretty quickly approved. Federal can take much longer and you may need to appeal if not approved the first time. You can apply for long term disability while collecting short term disability. Hope this helps!
I am an attorney who has experience with, but not expertise in, state disability and Social Security disability. State of California disability is a short term disability insurance which is handled through the State of California, and provides benefits similar to Unemployment Insurance. Any worker/employee who pays into the system and most do - are eligible. The W2 form shows SDI along the bottom, after state wages, state withholding, etc. (forgot box #). Some employers have VPDI, a "voluntary plan" which is private. but similar. There are time limits on CA State disability. It used to be six months. Check EDD.gov
Social Security Disability is a federal program designed for the long term, or permanently disabled. You basically need a cooperative doctor to certify that you cannot work, and cannot be expected to work for a long, long time. I handled one case for a former boyfriend with Hepititis C, and sever liver disease, and he was accepted on the first application, which was very unusual. His doctor was a good friend and very cooperative. I have heard, and observed in my tax practice, that applications are often rejected, and appeals are necessary, to obtain Social Security disability. There is one attorney in San Jose who handles these appeals. I could probably find his name somewhere, if necessary, if he is still in business.
So, the short answer. If short term disability, CA disability. Your doctor can certify you. If long term, more than one year, or permaent, Social Security disability. Of course, all this depends upon an employment record. For the self-employed, or under the radar workers, I have no suggestions to offer.