People will need disability insurance for different reasons. Many injuries and illnesses are disabling, such as kidney disease, congestive heart failure, and advanced stage cancers. However, there are other factors to consider – a worker may have sustained a back injury and, over the years, the condition becomes worse to the point where work becomes impossible for them to do. To qualify for benefits, a person must have a physical or mental impairment, the impairment must prevent them from doing any gainful work, and the disability must be expected to last at least 12 months. When a person believes they fit the requirements of a disability, they may look into disability insurance. But what is this and how does long term differ from short term insurance?
Disability insurance is the specific insurance policy that will cover some of an individual’s lost income when an injury keeps them from being able to work. A policy could be as short as a couple of months to as long as decades. How does a worker make the determination on the type of insurance they may need? It all depends on the individual worker’s needs, expectations, and budget.
Short Term Disability Insurance
This type of insurance is intended to cover those who know they will not be able to work for brief periods of time. Some of these shorter policies can last for up to two years, but typically they will last between three and six months time. They are usually the most affordable options. The benefits also begin quickly within the first two weeks upon the holder being disabled.
The disadvantages of short term disability insurance include benefits stopping within a few months and having fewer protections under certain circumstances.
Long Term Disability Insurance
This insurance provides monthly payments in the event of a disability lasting more than six months up until, in some cases, the holder reaches the age 75 or older. It gives a peace of mind to the holder who, knowing that they will have this disability for a long time, will be covered. Long term policies also typically have better coverage for hospital stays and adding supplemental insurance to increase the monthly payments.
However, long term policies carry one drawback – they are usually more expensive. They also carry a waiting period that can last anywhere between three and six months before benefits start rolling in. This type of insurance is a better option for individuals who have savings or other insurance to cover the first few months of their disability.
In some cases, a worker will choose to go with both short term and long term insurance simultaneously. However, this can carry with it very high costs and is not completely recommended because of such. People who can afford only one time of coverage may opt for long term and just save up for the first few months of coverage.
The best thing you can do when it comes to disability insurance is to have a lawyer look at your claim and review your best options. An experienced lawyer in disability will be able to answer any questions you have about receiving the benefits you deserve. At MDL, we can assess your claim successfully and will be on your side throughout the process!