November 21, 2008, Newsletter Issue #35: Primary Differences Between Short and Long Term Disability Insurance Programs

Tip of the Week

Short and long term disability insurance programs contain more differences than in name only. They are designed to provide different levels of protection and sometimes their contracts contain widely diverse language. Some primary differences include:

Benefit periods. Short term coverage typically provides benefits for one year or less, while long term disability income insurance provides benefits longer than one year, sometimes to age 65 or beyond. Elimination (waiting) periods. A typical range of waiting periods for short term disability insurance is from 7 to 60 days. Long term disability coverage plans often include elimination periods of from 60 to 180 days. Those professionals selecting both types of coverage should “match” their elimination periods to avoid overlap. Both short and long term disability premiums are affected by the brevity or extended length of waiting periods. Own Occupation definition and language. While typically not a factor in short term coverage, the definition of disability can be very important in a long term disability policy. If you have an “any occupation” definition of disability in your current coverage, you risk having your benefits terminated once you’ve recovered sufficiently to perform the duties of “any gainful occupation”, not necessarily your former occupation or profession. These are just a few of the differences between short and long term disability insurance. Visit informational websites, like ProtectYourIncome.com, to get more information and ideas to help you understand both types of disability income insurance and build an effective insurance plan.

Refer to your insurance policy contract for specific information regarding your coverage and for actual terms, conditions and exclusions. The above statements are general in nature and may or may not reflect the actual terms of your insurance policy.

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