Short-Term Disability Insurance

Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

Short-term disability insurance offers coverage for non-job-related injuriesillnesses, or medical issues that render you unable to work. It is a temporary form of coverage, typically lasting from 30 days to one year. Many employers in the United States offer short-term disability as an employment benefit, although it is only required in a few states. If your employer doesn’t provide this coverage, you have the option to purchase private insurance, although it can be costly.

When you are on short-term disability, you will receive a percentage of your salary, usually ranging from 50% to 60%. These payments are typically administered by an insurance company, and the frequency of payments may vary. It is important to note that short-term disability does not provide job protection. However, job protection provisions may be available through the Americans with Disabilities Act (ADA), depending on your specific plan.

Key Takeaways:

  • Short-term disability insurance provides coverage for non-job-related injuriesillnesses, or medical issues.
  • It is a temporary form of coverage that is typically offered as an employment benefit.
  • Short-term disability payments are usually a percentage of your salary, ranging from 50% to 60%.
  • Short-term disability does not provide job protection, but the ADA may offer some protections depending on your plan.
  • You can purchase private short-term disability coverage if your employer doesn’t offer it, but it can be expensive.

What is Short-Term Disability?

Short-term disability refers to a form of insurance that provides financial support when you are unable to work due to non-job-related injuriesillnesses, or medical issues. It covers a range of conditions, including major surgeries, chronic illnesses, and accidents. Short-term disability is distinct from workers’ compensation, which covers injuries sustained while on the job. It is important to note that the definition of disability may vary depending on the specific plan or policy.

Key Points:

  • Short-term disability insurance offers financial support when you cannot work due to non-job-related injuries, illnesses, or medical issues.
  • It covers a range of conditions, including major surgeries, chronic illnesses, and accidents.
  • Short-term disability is different from workers’ compensation, which covers injuries sustained while on the job.
  • The definition of disability may vary depending on the specific plan or policy.

Short-term disability insurance provides a safety net for individuals who encounter temporary health-related challenges that prevent them from fulfilling their work duties. It offers financial assistance during a period of recovery, allowing individuals to focus on their health without the added stress of lost income. Whether it’s a surgical procedure, a sudden illness, or a medical condition that requires ongoing treatment, short-term disability insurance can provide crucial support during these difficult times.

When considering short-term disability insurance, it is important to review the specific details and terms of the policy. Different plans may have varying coverage and eligibility criteria, so it is essential to understand what is included and how it applies to your personal situation. By familiarizing yourself with the coverage and its limitations, you can make informed decisions about your financial well-being and ensure that you have the necessary support in the event of a temporary disability.

What Is Short-Term Disability Insurance?

Short-Term Disability Coverage Comparison

Insurance ProviderCoverage DurationPercentage of Salary CoverageMaximum Benefit Amount
Company A90 days60%$2,000 per week
Company B180 days50%$1,500 per week
Company C120 days70%$3,000 per week
Short-Term Disability Insurance

Qualifying for Short-Term Disability

Qualifying for short-term disability benefits requires meeting the eligibility criteria set by your employer or insurance provider. In general, short-term disability covers injuries or illnesses that prevent you from performing your job. This can include major surgeries with lengthy recovery periods, chronic illnesses necessitating regular treatment, and injuries sustained from accidents. Mental health conditions may also be covered, but reviewing your plan’s documentation is important to confirm coverage. maternity leave may be considered a short-term disability, although some employers may have separate provisions for maternity leave.

The specific cost of short-term disability coverage can vary based on factors such as age and level of benefits. On average, it is estimated to amount to around one to three percent of annual gross income. It’s crucial to understand the qualifying conditions and costs associated with short-term disability to make informed decisions about your coverage.

Short Term Disability Eligible

Eligibility Criteria for Short-Term Disability

The eligibility criteria for short-term disability benefits are determined by your employer or insurance provider. While the specific requirements may vary, some common factors that could affect eligibility include:

  • The length of time you have been employed with the company
  • The number of hours worked per week
  • The reason for your disability (injury, illness, or medical condition)

It’s important to review your plan’s documentation or consult with your HR department or insurance provider to understand the specific eligibility requirements for short-term disability coverage.

Eligibility Criteria Comparison

Employer AEmployer BEmployer C
Minimum 3 months of employmentMinimum 6 months of employmentMinimum 1 year of employment
At least 30 hours worked per weekAt least 20 hours worked per weekAt least 40 hours worked per week
Injury, illness, or medical conditionMedical condition onlyInjury or illness

Note: The table above is a hypothetical representation and may not reflect the exact eligibility criteria of any specific employer.

Understanding the qualifying conditions for short-term disability is crucial to ensure appropriate coverage when needed. By reviewing the eligibility criteria and considering the associated costs, you can make informed decisions about obtaining short-term disability benefits. Remember to consult your employer or insurance provider for specific details regarding your plan.

Short-Term Disability Insurance Meaning

How Much Compensation Can You Receive?

When it comes to short-term disability, the amount of compensation you can receive varies depending on the specific plan. Most plans offer a percentage of your salary, typically ranging from 50% to 60%, with a cap on the dollar amount. This means that if you earn $1,000 a week, you could receive between $500 and $600 per week while on short-term disability. It’s important to note that some plans may provide different amounts based on the length of your service with the company.

To give you a better understanding, here’s an example of how short-term disability compensation could potentially work:

Length of ServicePercentage of SalaryWeekly Compensation
Less than 1 year50%$500
1-5 years55%$550
5+ years60%$600

Keep in mind that these percentages and amounts are just an example and may vary depending on your specific plan. It’s important to review your plan documentation or speak with your employer or insurance provider to get accurate information about your short-term disability compensation.

Applying for Short-Term Disability

Applying for short-term disability is a straightforward process that involves contacting your employer’s HR department or the insurance provider to initiate the application. It is important to follow the specific requirements and timeline for submission, as these may vary depending on your employer or insurance provider. To ensure a smooth application process, make sure to gather all necessary documentation to support your claim, such as medical records and any other relevant information.

Some employers may require the use of available sick days before short-term disability coverage begins, while others may require a note from a physician. It is essential to be familiar with your employer’s policies and requirements. By providing all the necessary documentation and complying with your employer’s protocols, you can increase the chances of a successful application.

If you have any questions or concerns about the application process, it is always a good idea to reach out to your employer’s HR department or the insurance provider for guidance and clarification. They will be able to provide you with the necessary information and support to ensure a smooth and efficient application process.

Key Tips for Applying for Short-Term Disability
1. Contact your employer’s HR department or insurance provider to initiate the application.
2. Gather all necessary documentation, including medical records, to support your claim.
3. Familiarize yourself with your employer’s policies and requirements for short-term disability.
4. Follow the specific requirements and timeline for submission.
5. Reach out to your employer’s HR department or insurance provider for guidance and support.

By following these key tips, you can navigate the application process for short-term disability smoothly and efficiently, ensuring that you receive the financial support you need during a temporary period of disability.

Short Term Disability Riders

Short-Term Disability Riders

  • Catastrophic Disability Weekly Benefit:
    • Provides additional payments if you’re catastrophically disabled after the elimination period.
    • Benefits continue alongside the Total Disability Weekly Benefit until the Maximum Benefit Period.
  • Family Care Rider:
    • You must be totally disabled and certified by a physician.
  • Guaranteed Insurability Rider:
    • Allows you to increase Total Disability Weekly Benefit without evidence of insurability.
    • Based on current income and Assurity’s limits as of the option date.
    • Not available if you’re currently disabled or receiving disability benefits.
  • Retroactive Injury Rider:
    • Pays a lump sum if an injury causes total disability within 30 days, continuing through the elimination period.
  • Return of Premium Rider:
    • Provides a return of premium upon policy cancellation, lapse, death, or age 65.
    • Calculated by adding premiums paid, multiplying by a set percentage, and subtracting paid benefits.

Conclusion

Understanding short-term disability insurance is crucial for protecting yourself financially during times of temporary disability. This type of coverage provides financial support when you are unable to work due to non-job-related injuries, illnesses, or medical issues. While short-term disability insurance is offered by many U.S. employers as an employment benefit, it is important to note that it is only required in a few states.

The amount of compensation you receive on short-term disability is typically a percentage of your salary and is administered by an insurance company. Familiarizing yourself with the eligibility criteria and application process is important to ensure you meet all requirements. Additionally, it’s essential to understand any job protection provisions that may apply, as returning to work after a short-term disability does not guarantee job security.

To customize your short-term disability coverage, you have the option to add riders to your policy. These additional provisions allow you to extend coverage for certain conditions or receive additional compensation for specific circumstances. Adding riders ensures that your short-term disability insurance meets your specific needs and provides the necessary financial protection during temporary disability.

In conclusion, short-term disability insurance offers peace of mind and financial security when you are unable to work due to non-job-related reasons. By understanding the coverage, benefits, and the process involved, you can ensure that you have the necessary support during times of temporary disability.

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Frequently Asked Questions

What is short-term disability?

Short-term disability refers to a form of insurance that provides financial support when you are unable to work due to non-job-related injuries, illnesses, or medical issues.

How much does most short-term disability pay?

During the covered event period, a short-term policy typically pays benefits that are 40-70% of the employee’s earnings, but only after the elimination period has ended.

Does Aflac pay you for being out of work?

Aflac offers Short-Term Disability Insurance to provide financial assistance if you cannot work due to a covered illness, injury, or mental health condition. This insurance can help you focus on recovering. There are various options to choose from that can cater to your individual needs.

What are the benefit periods for individual short-term disability policies that will usually continue?

Short-term policies provide benefits for a limited duration, usually three months, six months, or one year, after a short waiting period. Buying short-term disability insurance as an individual can be costly, but group plans are generally less expensive than long-term ones.

What are the sources of disability income coverage?

Disability insurance, which offers short-term and long-term coverage, can be obtained through employers, Social Security, or insurance companies. Premiums are determined by factors such as age and occupation. Benefits are paid every month.

What qualifies for short-term disability in PA?

To qualify for disability benefits, you need to fulfill the following criteria: You must be 18 years or above, not already receiving benefits based on your own Social Security record, incapable of working due to a medical condition that is expected to last for 12 months or lead to death, and should not have received a denial of disability in the last 60 days.

How do I apply for short-term disability?

To apply for short-term disability, contact your employer’s HR department or the insurance provider. The specific requirements may vary, but you will likely need to provide documentation such as medical records and possibly a note from a physician.

Is short-term disability expensive?

The cost of short-term disability coverage can vary based on age and level of benefits, but it is estimated to be between one and three percent of annual gross income. It is important to check with your employer or insurance provider for specific pricing details.

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Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

Shawn Plummer is a Chartered Retirement Planning Counselor, insurance agent, and annuity broker with over 14 years of first-hand experience with annuities and insurance. Since beginning his journey in 2009, he has been pivotal in selling and educating about annuities and insurance products. Still, he has also played an instrumental role in training financial advisors for a prestigious Fortune Global 500 insurance company, Allianz. His insights and expertise have made him a sought-after voice in the industry, leading to features in renowned publications such as Time Magazine, Bloomberg, Entrepreneur, Yahoo! Finance, MSN, SmartAsset, The Simple Dollar, U.S. News and World Report, Women’s Health Magazine, and many more. Shawn’s driving ambition? To simplify retirement planning, he ensures his clients understand their choices and secure the best insurance coverage at unbeatable rates.

The Annuity Expert is an independent online insurance agency servicing consumers across the United States. The goal is to help you take the guesswork out of retirement planning and find the best insurance coverage at the cheapest rates

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