Differences Between Short Term and Temporary Disability Insurance

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. It will not cover injuries or illnesses that happen on the job. There's usually a two-week waiting period before the benefits kicks in, and coverage only replaces your income for three, six, 12 or 24 months depending on the plan you have.

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's not work related. It usually covers extended work absences you take because of pregnancy or childbirth.

This insurance usually pays 60 percent of your salary for up to six months. You may access temporary disability insurance before your short-term disability insurance kicks in. If your illness lasts a while, you could be eligible for long-term disability benefits that assist you financially as you recover.

Should you Buy Short-Term or Temporary Coverage?

The choice on which disability coverage to buy is yours alone. It's obviously a wise choice if your employer provides it for you as part of your benefits package since you'll receive a free or reduced policy. Disability insurance is also a good idea if you don't have an emergency savings of nine to 12 months. Since it can help you pay your living expenses and bills, it gives you peace of mind while you're off work.

When deciding whether to buy short-term or temporary coverage, weigh the pros and cons of each type. Research premiums, too. While it's a smart investment, you have to be able to afford it.

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. It's valuable coverage that provides some financial assistance as you recover from an injury or illness.
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