Making Sense of Short Vs. Long Term Disability Coverage
Studies show that a 20-year-old worker has a 1-in-4 chance of becoming disabled before reaching retirement.
If you sustain a serious injury or are diagnosed with a medical condition that prevents you from performing your job, disability benefits, often a type of ancillary benefit, can ensure you’re paid until you can get back to work.
In this article we will discuss short vs. long term disability, the types of medical conditions each covers, and whether you should purchase one type of policy or both.
What Is Short Term Disability?
Short term disability policies provide employees with disability benefits for a small duration of time. These short term benefits are typically in effect for anywhere from three to six months.
To qualify for short term disability payouts, an employee must have sustained an injury or be experiencing a medical condition that makes it impossible to continue working for the time being. Also, this diagnosis must be formally documented by a doctor or health care professional for a person to qualify.
Examples of medical conditions that may qualify (qualifying conditions vary by policy) for short term disability coverage:
- Severe illness
What Is Long Term Disability?
Long term disability provides employees with disability benefits for a longer period of time in comparison to short term disability, sometimes for two, five, or even up to ten years. In some policies, benefits continue until retirement.
Unlike short term disability, long term disability doesn’t kick in immediately after an employee has sustained an injury or has a qualifying medical condition. This period of time a beneficiary must wait before gaining access to benefits is called an elimination period and varies by policy.
Examples of medical conditions that may qualify for long-term disability coverage:
- Musculoskeletal disorders
- Nervous system disorders
- Injuries from an accident
- Mental health problems
Short Vs. Long Term Disability – Do I Need Both?
Cost is always the big concern when it comes to answering this question. When considering short vs. long term disability coverage, keep in mind that you need to be able to afford the premiums in order to benefit from either. On average, disability policy premiums fall between 1 and 4 percent of your annual income.
Your employer may help cover some of these costs, especially with short term disability coverage. Employees seeking long term disability may pay a more expensive premium, with less financial support from their employer. Make sure to check with your employer to understand their specific benefits policies.
A big benefit to having both short term and long term disability coverage is that if you do experience a medically qualifying event, you shouldn’t have a lapse in coverage.
Disability Coverage Shouldn’t Be an Afterthought
Overall, short term and long term disability coverage can provide peace of mind. There’s no way to guarantee you won’t sustain a serious injury or develop a medical condition in the future, leaving you unable to financially provide for yourself and your family.
Work with your employer to learn about the potential for short term and long term disability coverage offered through your benefits department. You may find out you don’t have to debate short vs. long term disability options and can afford both types of coverage.
If you’re ready to learn more about benefits plans and how they can improve your business call 630.928.0500 or fill out the form and one of our Benefits Experts will contact you.