If you are temporarily unable to work due to an injury or illness, short-term disability insurance may be able to replace your income. You can buy a policy independently, but some workplaces provide short-term disability insurance as an employee perk. But, do you require short-term disability insurance? Read on to discover more!
Why is it Important to Have Short-Term Disability Benefits
While getting hurt or ill can occur at home and elsewhere, many incapacitating workplace accidents occur yearly, necessitating disability insurance coverage.
According to 2018 research, there are over 150 workplace fatalities each day in the United States, and between 7.4 million and 11.1 million worker injuries occur a year, many of which go unreported.
A quarter of today’s 20-year-olds have the possibility of being crippled before retirement, according to reports from numerous Disability Awareness Organizations. Some people with impairments will call for more assistance than what short-term disability insurance can offer. The average length of a long-term disability episode is 34.6 months, which equates to over three years of missed work and lost revenue.
Short-Term Disability Benefits
Gives You a Monthly Income Whether You’re Injured or Ill
The objective of a self-funded or employer-sponsored short-term disability plan is the same: it should provide you with a monthly benefit if you cannot work due to an illness or injury. Although this varies, short-term disability benefits typically pay between 40% and 60% of your monthly income. In some cases, insurance coverage will cover 100% of your weekly salary for a while.
The Majority of Short-Term Disability Insurance Plans are “Own Occupation” Plans
There are two ways that disability insurance policies define “disability”:
- Own occupation: If you cannot do your current job, you are disabled.
- Any occupation: To qualify for disability insurance payments, you must demonstrate your inability to do any employment.
For many professionals, it is far easier to demonstrate that you cannot perform your job than any other employment. Imagine, for instance, that you are a reputable neurosurgeon who experiences a tremor. Your health makes it unsafe for you to operate on patients. Thus, you qualify for short-term disability benefits under your retirement plan. In contrast, the insurance provider can contend that you can still work as a telemedicine physician, manage a medical practice, or teach under any vocation plan.
Thankfully, the softer occupation requirement is used by the majority of short-term disability insurance policies. You should study your Plan Document or Summary Plan Description (SPD). Learn more about the specific definition of disability that applies to your policy.
You’re not out of the woods, even if you have “own occupation” short-term disability coverage. The “any occupation” definition is frequently used for long-term disability insurance policies. So, say you have a chronic illness, injury, or permanent disability. Even though your short-term disability claim was quickly accepted, the insurer may attempt to claim that you are not eligible for long-term disability since you can still perform other tasks.
Stability and Tranquility for Well-Being and Healing
Your money will continue to flow while you are disabled, thanks to short-term disability insurance. If you don’t have any emergency funds, this can be a huge help. This deficiency in emergency fund savings can be made up for with short-term disability insurance. Remember that you could want to explore long-term disability possibilities if you can’t sustain your lifestyle over the long run.
Conclusion
When you need it most, short-term disability benefits can provide your family with a financial safety net. If your household depends on your income and you work for a living, purchasing short-term disability insurance may be worthwhile. Your capacity to earn is valuable. In actuality, it can be your most important asset. To get through a difficult time, protecting yourself with short-term disability insurance may be the solution. If you are interested, you can find other in-depth resources to learn more on this matter.
