Is There Short Term Disability Insurance?

Short term disability insurance is a private insurance policy that individuals can purchase that pays up to 60% of your salary should you become sick, disabled or pregnant while working. Most short term disability insurance policies are purchased through employers and are taken out as a payroll deduction. This type of insurance can be vital to solid fiscal health as statistics estimate that three out of ten people who enter the workforce will become disabled before they retire. While it may be optional, short term disability insurance should be seriously considered by individuals, especially if a policy is offered through and employer.

Short term disability insurance differs from long term disability insurance in that it is provided by private insurers, not government agencies. Most policies have a cap on how long the benefits can be paid out. Some employers offer short term disability insurance as part of their benefits package and pay the full cost of the premium. Other employers may contribute to part of the premium, with the employee also contributing towards the premium. Some employers make short term disability an optional plan that employees can choose to purchase if they wish.

Common causes of short term disability insurance claims include pregnancy, back injuries, and digestive and intestinal diseases. People can usually start receiving their benefits after they have been continuously ill or injured for 14 days. There is a difference between an illness and an injury in terms of receiving benefits. With an injury, claims and payments are usually processed immediately, whereas with an illness more time has to elapse to prove that it is disabling.

There are other conditions that may be involved with a short term disability policy. You may be required by your employer to use up all your sick time before benefits can kick in. You also may not receive benefits until you have been sick for 8 days. Each policy is different and they are often congruent with employer’s requirements. You can also get benefits retroactively if you had a minor ailment such as flu or a cold that developed into something more serious like pneumonia.

Short term disability insurance should be considered by anyone who may go through a short term illness that will cause them to miss work and lose income. The policy premiums are usually very reasonable and it is a small investment you can make in yourself knowing that you will receive benefits in case of an illness or injury. If you don’t have enough savings that will tide you over during an injury or an illness, it may be best to take advantage of an employer-sponsored short term disability insurance policy.