Disability Benefits

Short Term Disability

Short Term Disability Insurance Should Be An Integral Part Of Your Financial Plan

If we could predict when an accident would happen, they wouldn't call them 'accidents'. Likewise, there's always the possiblility of contracting an illness that may lead to your being unable to work for a couple of months or even years. If something like this were to happen, would you have enough savings to cover your living expenses while there are no paychecks coming in? If you're like most of us, your answer would be 'no'. In that case, you'll probably want to take some time to research short term disability insurance.

What Exactly is Meant by Short Term Disability Insurance?

This insurance product will pay you benefits equal to a percentage of your salary if you should become temporarily disabled due to injury or illness. In order for the injury or illness to qualify, the disability must lead to your being unable to work for a period of time as defined in the policy. Injury here does not normally include any conditions that are a result of employment, since these are usually covered by workers' compensation insurance.

According to research conducted by one industry group, over thirty percent of all working Americans will have to endure a significant short term or long term disability during their careers. Disability insurance therefore should be an integral part of your financial planning.

How does a Short Term Disability Insurance Policy Work?

The terms of each policy will vary depending on the issuer and the amount of the premiums you pay. The higher your premiums, the less restrictive the terms of the policy will be. Normally, however, one of these policies provides you with a weekly portion of your salary upon the occurance of a qualifying disability. The most common numbers are 50, 60, or 66 2/3 % of your weekly salary for a period ranging from 13 to 26 weeks. The majority of these policies also have what's referred to as a 'cap', which means that your benefit payment cannot exceed a certain amount.

Can You Tell Me More About Short Term Disability Insurance?

A short term disability insurance policy is frequently purchased as part of a group at work and can be paid by the employee, the employer, or both. If your policy is one of these types, it will usually be 'guaranteed issue' - which means that everyone in the group is considered qualified to participate and there is no medical exam required.

Typically, upon becoming unable to work, you start to receive benefits within one to fourteen days from the point of the actual disablement. Sometimes the time it takes for coverage to start will depend on whether you incur an illness or an injury. In these cases, If you sustain an injury, payments start immediately. Conversely, if you suffer an illness, the insurance company may need time to ascertain whether or not the illness qualifies as a disablement under the stipulations of the short term disability policy.