Life sometimes throws you a curveball. You might sprain an ankle playing soccer, need surgery, or experience a difficult pregnancy. These situations can temporarily prevent you from working and earning an income. That’s where short-term disability insurance comes in. It acts as a financial safety net, providing income replacement while you recover and get back on your feet.
What is Short-Term Disability Insurance?
Short-term disability pays you a portion of your salary (usually between 40% and 70%) in situations when non-job-related injuries, illnesses, or other medical issues prevent you from working for a limited time-period. (Note: “Non-job-related” is an important phrase because injuries sustained while you’re on the clock will typically be covered by worker’s compensation vs. short-term disability). It typically provides benefits for a shorter period, ranging from a few weeks to several months, depending on the policy and your situation.
Types of Short-Term Disability Insurance:
Traditional: Employers pay the full premium
Contributory: Both employers and employees contribute to the benefit cost
Core Buy-Up: Employees have the option to purchase more coverage
Voluntary: Employees alone pay for disability benefits
What to Look for in a Short-Term Disability Policy:
Premium: The monthly amount you (or your employer) pay for the policy.
Benefit Amount: How much of your income will be replaced?
Benefit Period: How long will benefits be paid?
Elimination Period: How long must you wait before benefits begin?
Covered Conditions: What illnesses, injuries, and conditions are covered?
Exclusions: What situations are not covered?
Cost: How much will the premiums be?
Illnesses or Injuries That Are Not Covered by Short-Term Disability:
Pre-existing conditions
Self-inflicted injuries
Use of drugs (non-prescription) or other illegal substances
Injury that occurred from doing something illegal
Cosmetic procedures that are not medically necessary
Work-related injuries or illnesses
An unexpected illness or injury can happen to anyone. Short-term disability insurance provides a crucial safety net, protecting your financial well-being during a time of need.
