What’s the difference between long term and short term disability? This is a common question that many people have when considering their insurance options. Both long term and short term disability insurance provide financial protection in the event of an injury or illness that prevents you from working. However, there are key differences between the two that are important to understand.
Firstly, the duration of coverage is the primary distinction between long term and short term disability. Short term disability insurance typically covers you for a period of up to one year, while long term disability insurance can provide coverage for much longer, often up to five or even ten years. This means that if you suffer from a temporary injury or illness, short term disability insurance may be sufficient to cover your lost income. On the other hand, if you have a chronic condition or a serious injury that will require a longer period of recovery, long term disability insurance may be more appropriate.
Another key difference is the definition of disability. Short term disability insurance often requires you to be unable to perform the specific duties of your job, while long term disability insurance may have a broader definition of disability that includes the inability to perform any type of work. This means that if you are unable to work in your current job but could potentially work in another field, long term disability insurance may still provide coverage.
Additionally, the waiting period for both types of insurance can vary. Short term disability insurance typically has a shorter waiting period, often ranging from 7 to 14 days, while long term disability insurance may have a longer waiting period, usually between 30 to 90 days. This waiting period is the time between when you become disabled and when your benefits begin.
When it comes to the amount of coverage, short term disability insurance usually replaces a portion of your income, typically up to 60% to 70%, while long term disability insurance may replace a higher percentage of your income, often up to 80% or more. This is an important factor to consider, as the amount of coverage can significantly impact your financial security during your period of disability.
In conclusion, while both long term and short term disability insurance provide financial protection, they differ in terms of duration of coverage, definition of disability, waiting period, and the amount of coverage. It’s essential to carefully consider your individual needs and circumstances when choosing between the two to ensure you have the appropriate coverage in place.
