Long-Term Disability vs. Short-Term Disability Insurance


As far as voluntary benefits are concerned, determining what to provide your workers with can be daunting. Knowing the right coverage levels and types might be overwhelming for your workers.

In order to make sure you, as well as your workers, have maximum protection when such an incident happens, lawyers at Gertsoyg and Company say that it is imperative to explore major differences between long-term disability and short-term disability insurance.

Long-Term Disability Insurance

LTD (long-term disability) insurance coverage starts after running out of short-term disability benefits. The disability or illness normally means individuals cannot go back to work completely.

Benefits may cover income replacement and coverage for rehabilitation and medical treatment based on the policy coverage.

Short-Term Disability Insurance

Short-term disability (STD) policies normally pay benefits for a shorter period. This can be one year, six months, or three months after the elimination (brief waiting) period.

STD insurance might be costly to buy as an individual. However, group plans are less costly compared to long-term group plans. Most employers provide short-term group plans as a company-paid benefit to every worker.

Choosing Between Short-Term and Long-Term Disability Insurance

Since short-term and long-term disability insurance offers different kinds of coverage, employees who may afford it may consider buying both of them so as to get covered completely in the case of disability. But this is not always an option, given the costs involved.

If you can’t afford both, your LTD lawyer will advise you to opt for a long-term disability and rely on your savings to cover the first few months of disability.

However, if after this, you are still torn between choosing LTD and STD insurance, you might want to look at the following key differences in order to make the right choice:

  • Benefits period: The amount of time an individual will get disability benefits is the benefit period. The best place to begin comparing long and short-term disability insurance is the duration they last. Long-term benefits are usually measured in years. This can be two, five, ten years, or even until retirement age. On the other hand, STD benefits last between three and six months.
  • Coverage levels: While short-term and long-term disability insurance provides flexibility in the coverage amount you may choose, STD normally ascertains a greater percentage of an individual’s income. This can be 70% for short-term and 40% for long-term disability.
  • Waiting period: The waiting period for STD insurance is normally less than two weeks, while LTD insurance will range between one month and a year. But every reliable LTD lawyer Vancouver says that the common waiting period for LTD is three months, which translates to 90 days.

Closing Remarks!

Disability income insurance provides a vital way of protecting your livelihood since you won’t work in a similar capacity anymore.

Short-term disability insurance will just cover the first few months that you are not able to work. On the other hand, LTD policies will last for years or even decades and can see you through retirement.

So when choosing between long-term and short-term disability insurance, don’t just look at the benefits period. Consider also looking at the waiting period and coverage levels.