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California residents should consider the importance of buying long-term disability insurance before they suffer lifelong impairment.

The state program stops making claim payments after one year. It helps with temporary losses only.

Social Security might take over at this point – if you qualify – but the monthly amounts you receive barely cover expenses. Worker’s Compensation pays more but only helps when you can prove the injury or illness was job-related.

The Golden State has some of the richest, most comprehensive set of government income support entitlements. Yet holes remain. Take steps now to avoid falling in.

Long-Term Disability in California

Private companies issue long-term disability insurance in California. Do not confuse these optional policies with plans operated or mandated by the state. You must take proactive steps to get this coverage.

Request a disability quote (Affiliate Link) as the first step towards purchasing coverage – if you are healthy enough to qualify and do not have a pre-existing condition. An agent licensed in California may contact you to review pricing and take your application if desired.

State Plan

The California State Disability program lasts for 39 or 52 weeks depending on the plan – and assuming you remain physically unable to work during this time. Residents could participate in one of two plans, or none at all.

  1. State Disability Insurance (SDI): 52 Weeks
  2. Self-Employment Elective Coverage (SEEC): 39 Weeks

Buying long-term disability insurance while healthy protects you in the event a future injury or illness extends past the 39 or 52-week mark. The policy could continue making claim payments for years after the state benefits run out.

Also, consider choosing an elimination period that matches the 39 or 52-week endpoint when signing up. The elimination period determines how quickly claim payments begin after a qualifying loss. Matching this feature to the SDI endpoint keeps the premiums affordable.

Pay Amounts

The policyholder determines the amount that long-term disability pays each month when signing up for the coverage. Since SDI may honor claims at the same time, it is critical to understand how the two schemes will coordinate benefits.

A private policy might replace up to 70% of previous earnings, with a monthly limit of perhaps $10,000. Compare these figures with what the state pays.[1]

  • 60% for workers earning more than $5,741.66 per quarter
  • $5,590 monthly limit affecting earners of $112,666 or more annually

For illustration purposes, consider how the two programs would coordinate benefits over an extended period of incapacity. The sample private policy (LTD) has a six-month elimination period. The individual has an annual income of over $175,000 – thus qualifying for the maximum monthly amount of $10,000 on the private LTD plan.

Months 1 – 6 7 – 12 13+
SDI $5,590 $5,590 $0
LTD $0 $4,410 $10,000


The long-term disability qualifying reasons for claims are another critical factor prompting California residents to buy a private policy. The coverage addresses two giant holes in other government schemes that sometimes take over after SDI benefits end.

  1. An eligible disability occurs when you are unable to perform the material and substantial duties of your regular occupation – not any job available in the economy as with Social Security.
  2. Off-the-job accidents occur while you are not working at any job for pay or benefits
  3. Off-the-job illnesses are sicknesses not covered under a Worker’s Compensation, occupational disease, employer’s liability or similar law

Permanent Disability in California

Purchasing long-term disability insurance from a private company pays off the most when a permanent medical condition befalls the policyholder. The policy fills the vast gaps in two California-backed programs addressing continual losses.

Higher benefit payouts across the decades make an enormous difference in your qualify of life and beat relying on what the government might provide.

Social Security

A typical long-term disability policy will cover permanent medical conditions as does Social Security in California, but at a much higher benefit level, and with more lenient eligibility criteria.

LTD Social Security
Monthly Amount Up to $10,000 $1,800 at most[1]
Qualifications Unable to perform duties of regular occupation Unable to perform the duties of any job

In other words, getting your claim approved is less challenging, the waiting time much shorter, and the rewards are much higher. Over the decades, the differences are profound.

Worker’s Compensation

A long-term disability policy could pay claims for permanent medical conditions when Worker’s Compensation does not. California requires employers to purchase this coverage, which pays a generous monthly benefit for occupational accidents and sicknesses.

However, what happens when you suffer a non-occupational loss, or cannot prove that your injury illness was job-related? The insurance company will deny your claim leaving only the meager Social Security benefit as your backstop.

Many lawyers earn their living by filing Worker’s Compensation lawsuits because so many people have chronic medical conditions – yet the cause is unclear. Proving that any of these maladies are job-related often requires a skilled attorney.

  • Cancer patients who had previous asbestos or toxic fume exposure
  • Back injuries caused by repetitive stress (Cervical Radiculopathy)
  • Hearing loss from loud machinery
  • Knee injuries caused by lifting and climbing

Footnoted Sources:

[1] CA Economic Development Department – Amount

[2] Benefit Amounts