Short-Term vs. Long-Term Disability Insurance

When you are healthy and free of any injuries, it’s hard to imagine becoming disabled.  A disability doesn’t have to be permanent.  It can be an illness or injury that keeps you from immediately returning to work.  Disability insurance income is designed to provide monetary benefits when you are recovering.  This type of insurance is a branch of health insurance.

Many employers offer group disability insurance.  If you are able to have the premium come directly from your paycheck, it is wise to have it deducted after taxes.  This concept is opposite of what most people think.  However, if your premium is paid before taxes, once you have a claim, your benefits will be subject to income tax.   When you are disabled, you will most likely need as much money as possible.

Disability insurance comes in two different forms – short-term and long-term.  Most disability insurance policies require that you must be disabled for a certain period of time before you will be eligible for disability insurance benefits.  These insurance policies also have an established time limit in which you are allowed to receive payments.  Disability insurance benefits will be paid as a percentage of your income.  For example, your benefits could be equivalent to 66 2/3 percent of your gross income.

Short-Term Disability Insurance
Short-term disability insurance is the most used out of the two types of insurance.  This coverage is usually only available through a group policy.  Typically, short-term disability benefits will begin right after an injury.  If you become ill and are not able to work, the benefits usually will not begin until one to two weeks of being away from work.  Short-term disability insurance can be purchased with a 3-month to 2-year benefit period.

Long-Term Disability Insurance
Long-term disability insurance can be purchased with a 2, 5, 10-year or longer benefit period.  Applying for long-term disability benefits is more complicated than short-term.  It can take anywhere from 1 to 6 months to be approved for benefits.  The typical waiting time is 90 days.  Long-term disability benefits are designed for individuals who have an illness or injury that is not expected to fully recover.  A permanent disability is generally a qualifying condition for long-term disability benefits. 

There are various types of long-term disability insurance policies, each with its own definition of disability.  For example, some policies will consider you disabled if you are not able to perform the job in which you were trained.  Other policies may consider you disabled if you cannot perform any job.

The application process for disability insurance is complex and unfortunately, it is not uncommon to be denied disability benefits.  If you have applied for disability insurance and have been denied, an experienced disability insurance attorney, such as J.P. Gonzalez-Sirgo, can assist you.  Please call 1-866-71-CLAIM if you have received a disability insurance denial.