California Disability Insurance Agent

When faced with an employee who's been disabled, uninsured employers have few options. Do you continue to pay all or part of a salary? Offer unpaid leave? Terminate employment?

For an employer and employee, the choices can be devastating, but having a disability insurance plan in place will save some of the grief. 

Taylor Benefits Insurance Agency in San Jose, CA wants to help you avoid that grief. 

There are two choices when it comes to disability insurance.

It is recommended that an employer provide both:

• Long-term Disability Insurance
• Short-term Disability Insurance

Short-term disability insurance

Short-term disability (STD) insurance pays a percentage of your salary if you become temporarily disabled. This excludes on-the-job injuries which are covered by workers compensation insurance). A typical STD policy provides you with 40 to 65 percent of your pre-disability base salary, according to the Life and Health Insurance Foundation for Education. The National Association of Insurance Commissioners estimates that these benefits generally last between three and six months. Most STD policies have a "cap," meaning you receive a maximum benefit amount per month. STD policies also have a limit on the amount of time you can receive benefits — up to two years, according to the Insurance Information Institute (III).

The average premium in mid-2009 for a group STD policy was $207 per year based on a 76-person group, according to Drew King, president of JHA, a disability and group life reinsurance division of General Re LifeHealth. STD insurance, which is most often purchased as part of a group at work, can be paid by either the employer or the employee. Group STD policies are "guaranteed issue," meaning you do not have to take a medical exam to buy coverage.

Long-term disability insurance

Long-term disability insurance picks up where short-term disability (STD) leaves off.  Once your STD benefits expire (generally after three to six months), the long-term disability insurance will replace up to 66 2/3% of an employee's income up to the age of 67 in a situation where catastrophic illness or injury exists.

A managed long-term disability plan also allows an employer to outsource to disability experts the difficult decisions surrounding a disabled employee. Along with income protection, most disability plans offer rehabilitation and return-to-work services that are essential to the recovery of disabled employees.

The average annual premium for a new group LTD policy in mid-2009 was $238 per person based on a 158-person group, according to King.

The goal of Long Term Disability insurance is to financially protect and proactively return disabled employees to a productive life.

Disability insurance is good security for the employer and the employee

Not all disabilities are forever and a prudent employer will benefit by having a disability plan in place that will help his valuable employees stay on the job.

Call our insurance office in San Jose, CA today at (408) 358-7501. We will help you negotiate the best rate and the best plan for your needs.

FAQs

How many people really use their LTD plan

There is a 1 in 5 risk that a 35 year old will be disabled for 90 days or more before age 65. You are more likely to become disabled than to die during your working years.

How much will LTD cost the company?

The general rule is that a fully insured LTD plan will cost a company about one half of one percent of the company's monthly payroll.

Will an LTD plan pay a disabled employee who returns to work on a part-time basis?

Yes, most LTD plans will pay an employee who is limited from performing all of their job functions, and has suffered a 20% or more loss of income as a result.

What are the most common income replacement percentages?

Most companies implement a plan that replaces 60% or 66 2/3% of an employee's income in the event of a disability. The highest percentage available is 66 2/3%.