If you have short-term and/or long-term disability insurance coverage, you may wonder what the difference is between them. Why have two different policies?
Roy Law Group is here to guide you through understanding what your short-term disability and long-term disability insurance policies cover. While these policies may be set up differently depending on your situation, there are some concepts that generally apply.
The difference between short-term and long-term disability
As you may expect from their titles, short-term and long-term policies fulfill the same need, however, at different points.
Short-term disability insurance is designed to address a short disruption in your ability to work, such as an injury that takes a few months to heal.
In contrast, long-term disability insurance is intended to pay out for a potentially longer period in situations where you simply cannot return to work due to a more serious condition, like recovery from cancer treatment.
How short-term disability works
Short-term disability covers a percentage of your wages for a specified amount of time if you become temporarily unable to work due to illness, injury, or pregnancy.
These policies are usually available through your employer’s employee benefit plan; however, you can also purchase short-term disability coverage on your own. If you purchase your own coverage, it is considered a stand-alone insurance policy. “Plan” is short for an employee benefit plan.
Typically, short-term disability benefits will pay approximately 80% of your weekly gross income for between 12 to 26 weeks with coverage generally beginning between one and 14 days after you become disabled. These policies generally define disability liberally and cover a wide range of situations with few restrictions or limitations on coverage.
Short-term disability insurance includes:
- A defined compensation set at a percentage of your gross weekly salary for a specified number of weeks
- Beginning shortly after the date you become disabled
- Coverage for a wide range of situations with few restrictions or limitations
How long-term disability works
Long-term disability covers a percentage of your wages when you have become injured or seriously ill. The idea is that your long-term disability policy will kick in after your short-term disability has been exhausted.
Because short-term and long-term disability policies are mutually exclusive benefits, it is often between 12 to 26 weeks after you become injured or ill that your long-term disability benefits will begin.
Most long-term disability policies cover around 60% of your pre-injury monthly salary, not including overtime, bonuses, or commission compensation. The length of coverage for your long-term policy is defined in your policy documents. Most policies provide compensation through age 65 or your Social Security retirement age, whichever is greater, as long as you remain disabled under the policy.
Read more: How Long Does Long-Term Disability Last?
These policies generally define disability more conservatively and contain a wide range of restrictions and limitations on the illnesses, sicknesses, and injuries they will cover. Often, long-term disability policies will become much more difficult to qualify for after 24 months of coverage.
Long-term disability insurance includes:
- A defined compensation set at a percentage of your gross monthly salary
- Potentially decades of compensation
- Beginning after your short-term disability benefits are exhausted
- Restricted or limited coverage to a fewer number of situations
Have you been denied on your disability claim?
At Roy Law Group, we have been battling disability cases and nothing else, since 2009. This area of law is incredibly complicated. Let our team of experts help you. If we take on your case, you are in a winning battle.
Contact us to learn how we can help you today.