Short Vs. Long Term Disability Insurance

What will you do if you’re injured and unable to work? While many people assume that Social Security Disability Insurance, workers’ compensation, or their own savings will be enough protection if they find themselves unable to do their job, this simply isn’t true in most cases.

Unless you’re injured on the job, workers’ compensation won’t help you and Social Security can be very difficult to get and can take too long to start. Personal savings, while a beneficial part of your overall financial plan, often isn’t enough to cover your expenses for the full time of most disability claims. To combat these difficulties, disability insurance makes it possible for anyone to maintain their lifestyle no matter the reason they cannot work.

What is the Benefit Period for Each Disability Insurance?

Benefit Period, the length of time you can receive your insurance, is one of the primary differences between the two insurances.

Short Term: 3 to 6 months.

Long Term: Anywhere from 2 years up to retirement age.

Cost Vs. Time Considerations

While shorter insurance types are considerably cheaper, most people who require disability need it for around three years on average. Though you may save money in the short term, this is unlikely to meet your needs.

When is Short Term a Good Option?

The primary reason to consider short term disability insurance is as a stop gap between working and when your long-term insurance kicks in. This is because short term benefits, while they don’t last as long, kick in much faster because of a reduced waiting period.

Waiting Periods

The waiting period for short term benefits is as little as two weeks, while long term can be anywhere from one month to one year. This waiting period, or elimination period, is a staple of many disability and long-term insurance policies. Some insurance companies will use this waiting period in lieu of requiring a deductible to be paid.