What Is the Difference Between Short-Term and Long-Term Disability Insurance?

Understanding the differences between short-term and long-term disability insurance is crucial for individuals planning to safeguard their financial future in the event of an illness or injury. While both cover loss of income due to disability, they vary in terms of coverage periods, benefits, and purpose. Here’s a brief summary of the main differences:

• Coverage Duration:

  • Short-term disability typically lasts from a few weeks to six months.
  • Long-term disability can provide benefits for several years or until retirement age.

• Waiting Period:

  • Short-term insurance has short waiting periods, often a few days to two weeks.
  • Long-term insurance has longer waiting periods, usually 90 days or more.

• Benefit Amount:

  • Short-term plans replace a higher percentage of lost income, often up to 70%.
  • Long-term plans typically cover 50% to 60% of pre-disability earnings.

• Applicability:

  • Short-term is suitable for temporary conditions, like recovery after surgery or childbirth.
  • Long-term is intended for prolonged or permanent disabilities, such as chronic illnesses or severe injuries.

At Bartolic Law, we understand the complexities and nuances of long-term disability insurance. Our team has years of experience in appealing denied claims, providing tailored legal strategies to ensure success. We recognize the financial and emotional impact of a denied claim, and our goal is to help individuals secure the benefits they are entitled to.

Short-Term Disability Insurance

Short-term disability insurance is designed to bridge the income gap when someone is temporarily unable to work due to injury, illness, or other qualifying conditions. This type of insurance often starts paying benefits shortly after the disability occurs, with waiting periods lasting anywhere from a few days to two weeks. Coverage can extend from eight weeks to six months, depending on the policy.

Short-term disability policies are commonly provided as part of employer benefits packages, though individuals can purchase coverage independently. These plans are particularly valuable for conditions like pregnancy, recovery from minor surgeries, or injuries such as fractures.

Key Benefits

• Quick financial relief during temporary incapacity
• High percentage of income replacement
• Short waiting period for benefits to begin

However, short-term disability is not sufficient for prolonged conditions, which is where long-term disability insurance comes into play.

Long-Term Disability Insurance

Long-term disability insurance protects your income if you’re unable to work for an extended period, or permanently, due to a disability. Unlike short-term policies, it comes with a longer waiting period, typically 90 to 180 days, but it can pay benefits for several years, until you reach retirement age, or as defined by the policy.

This type of insurance is particularly critical for conditions like multiple sclerosis, cancer, or degenerative disk disease. Its benefits can become a lifeline, especially for those who are sole earners or have significant family financial responsibilities.

Key Benefits

• Offers extended coverage, often until retirement
• Provides stability for chronic or life-altering conditions
• Focuses on helping individuals sustain long-term financial health

When Do You Need Each?

Short-term disability insurance is ideal for individuals with relatively stable health and who can afford to make do with temporary coverage for minor medical setbacks. Long-term disability insurance, on the other hand, is essential for protecting your future against unforeseen, life-altering medical issues.

For comprehensive protection, many people opt for both types, ensuring their income is covered in both the short and long term. Planning for disabilities, while often uncomfortable to think about, is an essential step toward maintaining financial stability and peace of mind.

If you’ve been denied long-term disability benefits, Bartolic Law is here to help. Contact us to learn how we can turn denials into approvals and ensure you receive the benefits you’re entitled to.