What are the differences between long-term and short-term disability?


Quick Answer

The primary difference between short- and long-term disability is the amount of time each policy type sustains a person's income. Short-term disability plans typically cover an individual for up to two years, while long-term policies begin after two years and can go up to age 67.

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Full Answer

Another difference is that short-term policies are paid more quickly than long-term plans. Waiting periods for short-term benefits range from zero to 14 days, depending on the policy. There may be two different waiting periods to receive short-term benefits: one waiting period for accidents and a different waiting period for sickness. Long-term policies may have waiting periods of between 30 and 720 days. The most common waiting period for a long-term policy is 90 days.

Long-term disability insurance helps people cover major costs in the event of a long absence from work. This is helpful as newly disabled individuals may not have enough savings to keep themselves afloat over several months or years, making them susceptible to default on payments, such as mortgage and other bills.

Individuals should assess their needs to determine which type of insurance is best for them should they decide to invest in this coverage. Working with a licensed insurance agent is important as well, as each state's requirements for terms of benefits and other important factors may differ.

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