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difference between long-term and short-term disability insurance

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Long-Term v. Short-Term Disability Insurance

Life delivers its fair share of challenges. You never know when a situation will arise that leaves you out of work, therefore out of a paycheck for a significant amount of time. Disability insurance can help support you in this type of predicament. As you begin exploring this coverage, you’ll need to understand the difference between long-term and short-term disability insurance.

According to PolicyGenius, one out of every four workers will face a long-term disability situation at some point in their life. Wouldn’t you feel like the odds are more in your favor if you’re protected financially? Below we outline the differences between short- term and long-term plans so when a less than desirable situation strikes, you know the difference between long-term and short-term disability insurance, in order to protect you and your family.

Short before Long

Most of the time you will enroll in a short-term disability insurance policy. Long term disability is the best option when your short term runs out. In most cases, a short term policy will cover somewhere between 40-60 percent of your salary for the first few weeks or months you are out of work. This type of policy is designed for someone who is missing work but intends to return shortly after healing from an injury or invasive surgery.

When does long-term disability insurance become a solution?

Coverage gaps. If you are unable to return to work due to your injury, long term disability kicks in to cover your expenses. These policies tend to cover periods as long as several years to the rest of your work life depending on the nature of your policy. Some of the most common causes of long-term disability are back pain, mental illnesses, or physical illnesses such as cancer, stroke and heart disease.

Cost Commitment 

When it comes to the bottom line, its important to understand how much of an investment a disability insurance policy can be. Long-term policies are customizable and protect you for a longer period which makes them more expensive. This can be a deterrent for considering a long term policy. However, if you get hurt and don’t hold a long-term policy, you will end up paying more in the end without the financial protection.  It’s best to contact your insurance agent to discuss your specific situation to determine the most cost-effective plan.

Typically, short-term policies are offered by your employer. Some larger corporations may offer long-term policies to you. However, if your employer does not offer long-term policies, it’s up to you to purchase it. In a situation where an employer doesn’t provide any disability insurance, you should contact a Smallwood and Small Insurance agent to craft a plan for you.

Long-term disability is key

So which is most important?

The answer is both, but for specific reasons. If you suffer from a minor injury that you can confidently estimate will only keep you out of work for a few weeks, short-term disability is the perfect solution. However, investing in a long-term plan can cover all your bases. If you find yourself injured on the job and unable to work the rest of your life, who pays the bills? Long-term policies not only give you protection but also your family. It’s better to prepare yourself now for the unexpected rather than leave yourself, family, and your assets at risk.

Stop by on one of our Smallwood and Small locations to learn more about the difference between long-term and short-term disability insurance. Visit our website for more information about disability insurance and receive a QuickQuote online.



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