What You Need To Know About Short- Versus Long-Term Disability Insurance

Disability Insurance

Whether you’re an employer or an employee, a good disability insurance policy is key to being protected in the event of an injury resulting in disability and subsequent income loss. If you’re deciding on an individual or group policy, it may be helpful to understand the differences between short- and long-term disability insurance.

Coverage Periods Range From Three Months to Retirement

The main distinction between short- and long-term policies is the term periods they cover. If you only need coverage for a brief time, you can find three- to six-month short-term options. Since short-term policies are usually no longer than twelve months, long-term plans can offer coverage for years or even decades, sometimes up to retirement.

Cost Varies Based on Several Factors

A number of different factors go into determining the cost, typically including:

  • Your age
  • Your current health status
  • Your type of occupation

Short-term group policies may be cheaper than long-term plans due to their briefer payout periods. Regardless of the plan, your policy should total about 1% to 3% of your yearly salary.

No matter your budget or needs, a quality disability insurance policy can offer you protection when you need it most. With these key facts, you can choose the right short- or long-term disability insurance option for your situation.