The Difference Between Long Term and Short Term Disability

Short term and long term disability insurance have similar purposes but are designed to function a bit differently. Here are some of the primary differences.

• Elimination (waiting) periods. Waiting periods for short term disability coverage typically range from seven to twenty-one days. Even a short long term disability elimination period can be as long as 45 to 60 days. Some long term disability policies can specify waiting periods of 90 to 180 days.
• Length of benefits. Most short term disability insurance plans limit your benefit period to one year or less. Long term coverage has a wider range of choices, typically from two years through age 65. Some insurers even offer lifetime benefit periods.
• Government insurance. Five states in the U.S. (RI, NY, NJ, CA, HI) and Puerto Rico offer employer-mandated temporary disability insurance (TDI), sometimes called “cash sickness” coverage, for employees disabled in non-workplace situations for the short term. Workers Compensation insurance is also required in all states to provide benefits for employees injured while at their workplace. These programs are designed to function as short term disability insurance. The Social Security Disability Income (SSDI) program was created to provide long term disability benefits to all citizens who have accumulated sufficient “credits”. You earn credits for all jobs you’ve held that were covered by the Social Security retirement system.

There can be a number of other differences based on the terms of coverage and the insurance company providing the protection. For example, short and long term disability insurance may have different definitions of disability, claim procedures, exclusions from coverage, and/or the ability to enhance your coverage through the addition of “riders” (providing extra protection) to your insurance contract. Use respected websites, like ProtectYourIncome.com, to become a knowledgeable shopper for disability insurance coverage. 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.