State Disability Insurance

State disability insurance is hard to find--only five states sponsor programs for this specialized area. California, New York, New Jersey, Hawaii and Rhode Island and the Commonwealth of Puerto Rico have full-fledged programs designed to compensate for lost wages due to disability. These programs can be thought of as emergency funds, as they are short-term and benefits are limited.

These plans are, however, far better than nothing, which is basically what exists in other states. California may only pay up to $336 a week for 52 weeks, but this might keep a family in their home, buy them food, and keep them from going on welfare or filing for bankruptcy. The family's lifestyle might well be adversely affected, but any amount of income protection could enable them to bounce back from the consequences of the wage earner's disability.

Short-Term Assistance

State disability insurance is designed to bolster the wage earner who has a short-term disability. For any long-term medical conditions, employees must depend on group disability insurance at work, or individual insurance. State-sponsored plans are especially helpful to workers who have moderate to low incomes. For those who have higher salaries, however, these programs will certainly not sustain their lifestyle.

Many workers seem to think that if they pay into disability insurance in their state, they will be take care of. Add to this the idea that Social Security provides a safety net, and many employees mistakenly believe that a disability will not have severe consequences for them. Social Security Disability Insurance is as limited as state insurance, and is very difficult to obtain. Employees should investigate these programs to understand exactly what they will and will not provide.