In this informative blog, we will review the differences between short term disability insurance and long term disability insurance.
There are many different types of insurance policies available through workplaces, yet many employees failed to take advantage of them. This is due to a variety of reasons, but one of the biggest is not understanding what policies are available and what they cover. In this informative blog, we will be reviewing the key differences between short term disability insurance and long term disability insurance so that you can make sure you are protected.
What Is Disability Insurance?
Disability insurance is designed to help offset the costs associated with being unable to work as a result of a disability, which might include an injury or a serious illness. This type of insurance pays the benefits directly to the beneficiary, so you have plenty of flexibility as to how the money is spent. Depending on the type of disability policy that you choose, you can receive coverage for about 40-70% of your typical income for a set period of time. The biggest differences between the two types of disability insurance policies are how long you will be covered and how much coverage you receive.
How Long Does Your Disability Insurance Last?
As you might be able to guess based on the name, one of the biggest differences between short term and long term disability insurance policies is how long they offer benefits to the beneficiary. Short term disability policies are designed to help provide you with income for a shorter-term illness, so most policies offer coverage for 3 to 6 months maximum. Long term disability insurance policies are much more expansive, and they can cover a set period of years or the entire period until you would reach your retirement age.
How Does the Level of Coverage Change?
There are many different ways that you can customize your short term or long term disability insurance policy based on your specific needs. However, there are some general things that tend to differ between the two. Short term disability insurance will often cover a greater proportion of your income. It is not uncommon to see a policy cover 70% of what you would typically be making. However, the range is much broader for long term policies, as they might cover anywhere from 40% to 70% of your current income.
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