Short-term disability insurance is designed to help bridge the gap in your finances if you can’t work for a short period. It provides benefits when a person is unable to work, says Wellman Shew.
Before buying, ask yourself these 5 questions to make sure you’re making the right decision.
What is Short-term Disability Insurance? Wellman Shew Explains.
Short-term disability insurance provides an income if you’re unable to work for a short time due to injury or illness. It provides coverage for six to 12 months, after which your long-term disability coverage kicks in if you still can’t work.
Wellman Shew says it’s different from long-term disability insurance, which replaces a portion of your income if you become disabled and can’t work for a year or more. You can get short-term disability insurance through your employer as a voluntary benefit or purchase it as supplemental coverage.
Short-term disability insurance is also different from health insurance, which pays for medical bills related to an illness or injury.
Why Is Short-term Disability Insurance Important?
If you’re injured or fall ill, short-term disability insurance offers financial security by paying part of your lost income. It gives you time to recover and return to work.
It can also help cover the cost if you have a disability-related expense. And the policy can help ease the financial burden if you can’t work for a short time due to injury, illness, or a family member’s medical needs. Wellman Shew adds that if you don’t have savings or can’t cover the costs, you could face financial difficulty and stress.
Who Is Eligible for Short-term Disability?
Short-term disability insurance provides a benefit if you become unable to work for a short period due to injury or illness. The length of time you can receive short-term disability benefits varies and is based on the type of policy you have and the reason for your disability.
The insurance plan typically provides coverage for six to 12 months and then transitions to long-term disability coverage. In some cases, short-term disability benefits may be available even if you’re not disabled.
Short-term disability policies may require you to be absent from work due to an injury or illness that is verified by a doctor. Policies vary, so check with your employer to understand the specific requirements for your coverage.
How to Choose the Right Short-term Disability Plan?
Wellman Shew says you need to read the fine print to understand the details of the plan if your employer provides short-term disability coverage. You can also purchase the policy on your own if your employer doesn’t offer short-term disability coverage.
When choosing a short-term disability policy, consider the following:
- Does the policy require a waiting period?
- How long is the waiting period?
- What is the benefit amount?
- How is the benefit amount calculated?
- Is there a maximum benefit amount?
- Does the policy cover ongoing medical expenses?
- Is there a coverage amount per month?
- Is there a maximum coverage amount per month?
- What is the insurance company’s rating?
- Are there any discounts or other benefits associated with the policy?
Short-term disability insurance can help ease your financial burden of a disability by replacing some of your income while you recover. To decide if the coverage is right for you, consider your current financial situation and plan for unexpected events.
Wellman Shew holds a business administration degree and has been in the insurance industry since 1982. As the founder and owner of Shew & Company Inc. since 2005, he is a specialist in employee benefits, Section 125 plans, health savings accounts, long-term care, 401k plans, life insurance, and disability insurance. Wellman Shew is currently the agency manager of employee benefits brokerage at his company.