What's the difference between short and long term disability?
Disability insurance provides funds when you are unable to work due to disability. The primary differences between short term and long term disability are: 1) the amount of time from the occurrence of a qualified disability until benefits are payable (the waiting period); and 2) the length of time benefits will be paid.
Short Term Disability Insurance replaces a portion of your pay while you are out of work due to illness, pregnancy or injury. As the name implies, the benefit is payable for a limited period of time. There are a variety of plan options available. A typical short term disability plan would begin paying a benefit on the first day of disability due to a non-work related injury or the eighth day for illness or maternity disability. The benefit is payable as long as the individual remains disabled, but not to exceed a maximum benefit period of usually three or six months.
Long Term Disability Insurance provides you and your family with financial protection if you cannot work for an extended period of time. The waiting period is longer, usually three or six months. Benefits are commonly paid on a monthly basis and can continue up to Social Security Normal Retirement Age.