Short-term disability insurance is an important resource you may have heard about through your job or a private insurance agent. Understand what short-term disability insurance is as you decide if it's right for you.
Short-Term Disability Insurance Defined
Short-term disability insurance is a benefit that covers a temporary disability caused by an illness or injury. Usually in effect for a short time period, it pays the policy holder up to 66-2/3 percent of their weekly earnings.
It may also include a benefit that helps an ill or injured employee return to work. The waiting period to file a short-term disability insurance claim is up to two weeks after you become ill or injured, and you should be prepared to show medical proof of your illness or injury.
Benefits usually last from three to six months, and your policy will have a maximum per-month benefit cap.
Why You Need Short-Term Disability Insurance
Short-term disability insurance is designed to provide financial assistance if you suffer an illness or are injured. If you have to take time off work, this coverage can help protect your savings and help you manage living expenses and other financial obligations.
Top reasons people purchase short-term disability insurance
- Pregnancy
- Injuries
- Joint disorders
- Digestive issues
- Cancer
An Example of how Short-Term Disability Insurance Works
Here's an example of how short-term disability insurance can help you. Let's say you acquire a bad infection and must be on bed rest for a few weeks.
Instead of worrying about money, tapping into your savings, racking up credit card debt, or pushing to return to work before you're healed, you can rely on short-term disability insurance. Your policy only covers a portion of your weekly income, but it can be a big help.
If your salary is $32,000 with weekly gross earnings of $615.38, your weekly short-term disability insurance benefit will be approximately $406.15. You can use that money to pay expenses such as rent, groceries, or other bills.
Who Should Buy Short-Term Disability Insurance?
Short-term disability insurance is important for almost anyone, especially if you don't have a large emergency fund. Review your overall financial situation with a trusted advisor as you decide if a short-term disability policy is right for you.
How to Buy Short-Term Disability Insurance
Talk to your Human Resources manager about short-term disability insurance or talk to an agent. You can also purchase a policy through your personal insurance agent.
If you want to compare related coverage options, consider exploring International Disability Insurance for global needs or reviewing Enhanced Disability Insurance options that may offer added features.
Short-term disability coverage can protect your financial security while you recover and help give you peace of mind until you can return to work.
Frequently Asked Questions
How long do short-term disability benefits typically last?
Benefits usually last from three to six months, depending on the policy terms and the nature of the disability.
How soon can I file a short-term disability claim?
The waiting period is commonly up to two weeks after you become ill or injured, and most insurers require medical documentation to support a claim.
What percentage of my income does short-term disability pay?
Most short-term disability policies pay a portion of your weekly earnings—commonly about 66-2/3 percent—subject to a maximum benefit limit.
Can I buy short-term disability insurance if my employer doesn't offer it?
Yes. You can often purchase an individual short-term disability policy through a personal insurance agent or broker.