Disability insurance is one benefit your employer may offer. You may have access to short-term or temporary disability coverage that replaces a portion of your income in certain cases. Know the difference as you understand your benefits package.
What is Short-Term Disability Insurance?
You may become injured or ill outside of work and need time off from your job to get medical treatment or focus on recovery. After you use all your sick or vacation days, short-term disability can pay a portion of your income.
Some employers provide short-term disability as part of the employee benefits package or you can purchase a policy from a private insurance company such as Enhanced Disability Insurance. It will not cover injuries or illnesses that happen on the job. There is usually a waiting period before benefits kick in, and coverage typically replaces a portion of your income for a limited term—commonly three, six, 12, or 24 months depending on the plan.
What is Temporary Disability Insurance?
Like short-term disability insurance, temporary disability insurance replaces part of your income if you suffer an injury or illness that is not work related. It often covers extended work absences taken because of pregnancy or childbirth.
This insurance commonly pays around 60 percent of your salary for up to six months. You may access temporary disability insurance before short-term disability begins, and if your illness lasts longer you could be eligible for long-term disability benefits to assist financially while you recover.
Should you Buy Short-Term or Temporary Coverage?
The choice of which disability coverage to buy is yours. If your employer provides coverage as part of your benefits package, it is usually a sensible option since you may receive a free or reduced-cost policy.
Disability insurance is especially valuable if you lack an emergency savings fund large enough to cover several months of expenses. It helps pay living costs and bills while you are off work, offering financial stability and peace of mind.
When deciding whether to buy short-term or temporary coverage, weigh the pros and cons of each type and research premiums and benefit periods. Compare options and costs listed under different policy types, for example policies found in Short Term Productions Insurance, to see what fits your needs and budget.
Losing work time after an accident or illness affects your ability to pay bills and care for your family. Check with your Human Resources manager to see if your employer offers short-term or temporary disability insurance, or talk to an agent for help understanding your options.
Frequently Asked Questions
How long is the typical waiting period before short-term disability benefits start?
Many plans have a waiting period of about two weeks, but waiting periods vary by policy and insurer.
Does temporary disability insurance cover pregnancy and childbirth?
Yes, temporary disability insurance commonly covers pregnancy and childbirth-related leave, but benefit amounts and durations depend on the plan.
Will disability insurance cover an injury that happened at work?
No—short-term and temporary disability policies generally do not cover work-related injuries; those are usually handled by workers' compensation.